Google is in talks with contract manufacturers in order to move some production of Pixel smartphones to India. The likely candidates bidding to assemble Pixel phones in India include Foxconn (BharatFIH), Lava and Dixon Technologies.
Google has been trying to move its production from China since the end of the Covid-19 pandemic. It solidified plans to move production away from China to Vietnam last year. However, just like Apple, Google hopes to capitalise on India’s favourable polices for smartphone production.
At least three sources have confirmed with businessline that Google is in talks with various suppliers. In fact, Google had spoken to suppliers in India in 2021 and 2022 as well, when Foxconn was likely to win the bid. However, those plans did not materialise at that time.
The Indian government is intent on attracting technology companies moving away from China due to geopolitical uncertainties. During Sunder Pichai’s visit last December, the possibility of “made in India,” Google Pixel phones was a key focus for the government.
If talks with suppliers in India materialise, Google will be the third major global device player to use India as an export-oriented manufacturing hub. Apple and Samsung are already planning to shift a significant chunk of their production to India. Apple plans to shift 18 per cent of its production to India by 2025.
By locally producing phones in the country, Google could also boost sales for its smartphones in India. Google’s high-end smartphone has not performed well in India, and it has skipped launching the flagship versions of its phone in India for the past three years, instead focusing on serving the market with the mid-range a-series line-up. By producing phones locally, Google would avoid the heavy import duty levied by India on imported smartphones.
Google shipped around 9 million Pixel smartphones last year, according to Counterpoint Research. A Bloomberg report said the discussions in India underscore Google’s plans to move production beyond China and Vietnam. Local assembly could help Pixel sales as India is a key growth market for Google’s services, and if the phone effort is successful, Google could also move production of other hardware such as speakers to India, Bloomberg said
India nearly doubled smartphone exports in FY23 to over $11 billion, with the majority of export value coming from global smartphone makers. Apple exported almost $5 billion from India in FY23, with Samsung following close behind. Global smartphone makers have been some of the biggest beneficiaries of the mobile PLI, and have also contributed the most to overall production numbers for the country.
However, while the numbers look rosy for mobile production, Indian economist, Raghuram Rajan recently pointed out that in a bid to push mobile production, we might have become more dependent on the import of components. The combined net imports rose from $12.7 billion in FY17 to $21.3 billion in FY23.