Amidst protests against Chinese companies, Xiaomi expands production facilities in India

Chinese electronics manufacturer Xiaomi has tied up with BYD and DBG for smartphones, and Radiant for smart TVs in India, to expand its reach in the Indian market.

Speaking to mediapersons on Thursday on completion of five years in India, Manu Kumar Jain, Managing Director, Mi India, said that Xiaomi will also focus on exports from India, but it will first cater to the domestic market.

“From an India growth perspective, we would want to continue investing for the long-term and manufacture not only smartphones and TVs but also components. We have already sold three-million ‘Made in India’ TVs. Like smartphones, we saw demand for TVs also going up significantly as people were at home and wanted to watch OTT content,” Jain said.

Capacity expansion

He said the DBG unit in Haryana is already operational and will increase Xiaomi’s monthly manufacturing capacity by about 20 per cent. He added that the BYD unit in Tamil Nadu will also be operational soon. Currently, Xiaomi India has five campuses, where its partners Foxconn and Flex assemble phones in Tamil Nadu and Andhra Pradesh.

Also read: Xiaomi to launch the Redmi Note 10 series in India on March 4

“There was a need to expand capacity given the huge increase in demand for smartphones on account of work and study from home and high content consumption, and this ramp up in capacity will help in meeting that demand,” he said.

Majority of components used in these phones are either locally manufactured, assembled or sourced from India, he said, adding that around 75 per cent of the value of the phones are now locally sourced as components such as PCBA, sub-boards, camera modules, back panels, wires and chargers are made in India.

These components are being manufactured by partners such as Sunny India, NVT, Salcomp, LY Tech, Sunvoda and others. However, the rest of the components still have to be imported because of chipsets or semiconductors are still not available here.

Jain said over these last five years, Xiaomi has generated employment for about 30,000 people in the manufacturing facilities for smartphones and about 1,000 for manufacturing units in smart TVs. In totality, including vendor partners and dealers, the company has generated more than 60,000 employments.

On PLI scheme

On asked about the company’s participation in the recently announcement of production linked incentive (PLI) scheme and if Xiaomi would make an export hub for its products, Jain said that these schemes will bolster manufacturing in India, and some of Xiaomi’s contract manufacturing partners have received approvals from the government under the PLI scheme.

However, he added that the demand in India has grown significantly amid the pandemic and the company would look at meeting the domestic demand before it starts exporting on a large scale.

Xiaomi had just started exporting smartphones to markets such as Nepal and Bangladesh in 2018-19, but due to pandemic last year, it was unable to meet the demand.

Overall, Jain said the smartphone market in India is expected to continue its growth trajectory and could see shipment of 160-165 million units this year.

The smartphone market grew 19 per cent year-on-year in December 2020 quarter with Xiaomi (including Poco) being at number one position with 26 per cent market share. It was followed by Samsung (21 per cent), Vivo (16 per cent), Realme (13 per cent) and Oppo (10 per cent) , as per the Counterpoint data.

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