According to a report, the union government is expected to urge Chinese smartphone manufacturers to employ local enterprises for product distribution, citing India’s strength and ecosystem for technology distribution.
According to reports, India is beefing up its scrutiny of Chinese smartphone manufacturers. According to a recent source, it is planning to put pressure on manufacturers such as Oppo and Vivo to stop depending on Chinese partners and instead utilise local enterprises for product distribution.
Oppo and Vivo have a combined market share of over 10% and 15%, respectively. These big smartphone manufacturers, which are typically strong offline players, have recently built a layer of Chinese partners to sell their products in the market, which has attracted Indian regulators’ interest.
Because there is now no legal structure in place to prevent such operations, the administration is likely to explore its concerns with lawmakers.
This would be done while drafting a legal framework, which may contain a section about dealing with distribution businesses from nations that share India’s borders, reported Economic Times. According to an anonymous industry executive who spoke to Economic Times, the government’s initial goal would be to resolve the situation without enacting any regulations, but if necessary, an official notification might be issued. “The consensus is that there should be no Chinese distribution in India since they already have market access. Distribution of tech products is where India already has strength, a point which will be conveyed to Chinese companies soon,” the executive added
According to the Economic Times, this would be done while establishing a legal framework, which might include a section on dealing with distribution enterprises from countries that share India’s borders.
The government’s original intention, according to an unidentified industry executive who talked to Economic Times, would be to address the matter without imposing any rules, but if necessary, an official notification would be released.
“The consensus is that since China already has market access, there should be no Chinese distribution in India.” The distribution of tech products is an area where India already excels, according to the executive. “This is a point that will be conveyed to Chinese companies shortly,” he added.
These smartphone manufacturers have chosen state-level Chinese origin distributors, who then deal with smaller tier two and three distributors, according to BBK Electronics, a Guangzhou-based international corporation.
“This has been going on for a while,” says another industry insider. The Indo-Chinese border concerns, on the other hand, have resulted in a thorough examination of Chinese brands.” He continued, “Having Chinese distributors adds no value to the Indian handset ecosystem.”
“Money earned by Indian distributors can stay within the boundaries,” the CEO added. Because it’s an old established ecosystem that larger players constructed for businesses like Samsung, Nokia and LG, Indians have the experience.
Most regions have three to four significant distributors at the state level. Before launching their brands, most Indian handset brand boosters, such as Lava, Micromax, and Karbonn, worked as distributors. Some of the industry’s most well-known ICT and handset wholesalers are HCL, Jaina Group, Optiemus, Ingram Micro, Syska, UTL Group, and VRP Telematics.
According to a third executive working with a big supplier, Chinese brands have been able to establish control over the full distribution in India. The purpose, he explained, was to take control of tier two and three distributors and determine market dynamics.
According to a recent source, the authorities are now sending notices to Chinese smartphone manufacturers, requesting information on the data and components used in the devices. Vivo, Oppo, Xiaomi, and OnePlus are the businesses in question, and they collectively account for more than half of the Indian smartphone market.
The government is also apparently compiling a list of approved suppliers and reputable firms for telecom equipment and networking devices to prevent alleged cyber espionage. Experts believe the move is meant to keep Chinese businesses like Huawei and ZTE, which have been accused of espionage, out of critical telecom network regions.
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