Chinese smartphone maker Xiaomi is opening two new mobile phone manufacturing plants and one new TV manufacturing unit in India. In an interview with Mint, Xiaomi India Head and Global Vice President, Manu Jain, said this means 99% of the company’s smartphones sold in India and 100% of its televisions will now be manufactured within the country.
“We would love to see India as an export hub. We started exporting in small quantities last year to nearby countries like Bangladesh and Nepal. Right now, the number one priority for us for the Indian business is to meet the local demand, which we believe is significantly more than what we are supplying. Once we meet 100% of the local demand is when we will start thinking of further increasing out export,” said Jain.
Further, Jain said one of the two mobile manufacturing plants is already up and running. The company has partnered with DBG India, which is running a plant in Haryana. The second plant will be set up by Chinese electronics maker BYD in Tamil Nadu. Having plants in both North and South India will keep the company better positioned to tackle possible lockdowns in either side of the country. “At least with respect to covid, I think our business is a lot more stable and resilient, as compared to what it was nine months ago,” he said.
The new television manufacturing plant is being set up in Telangana by Radiant, a Hyderabad-based television manufacturer. Xiaomi also has two other mobile manufacturing plants in Tamil Nadu, run by Foxconn and Flex, and TV manufacturing plant in Andhra Pradesh, run by Dixon Technologies.
According to Jain, while the company has been assembling phones in India for a while now, the scenario is “rapidly changing”. He said “majority” of the components being put in its phones, including the printed circuit board assembly (PCBA) and sub-boards, back panels, chargers and battery, are being locally manufactured here. The company plans to start manufacturing camera modules, in India from 2021.
“Initially this investment (cost of setting up factories) could be slightly higher (than paying import duties on components), but it will turn out to be a better decision from a long-term point of view,” he said. “There are a lot of tangible and intangible benefits, which will benefit the business overall in the long term,” he added.
The electronics industry has been facing a global supply shortage recently due to a global rise in demand for electronics products. Jain said the supply chain disruptions have affected Xiaomi too, but the company has been seen “significant improvements” each quarter. “In fact, we’re already ahead of what we used to be in the pre-covid world right now,” he said.
India’s smartphone market declined for the first time since 2009 in 2020, dropping by about 2%, according to the International Data Corporation (IDC) quarterly mobile phone tracker for the fourth quarter of 2020. This was because of pandemic-driven lockdowns and supply chain disruptions. However, the country still saw 150 million units in the year, and Jain said the market could easily touch 250-300 million shipments in the next two to three years.
