India’s smartphone market leader Xiaomi requested the Indian government to provide manufacturing incentives and lower import taxes, amid heavy scrutiny levied at Chinese companies in the country.
In a letter seen by Reuters, which is a response from the Chinese smartphone vendor to a query from India’s IT ministry asking how to develop its local component manufacturing sector, Xiaomi said smartphone equipment suppliers are wary of setting up operations in the South Asian nation, as Chinese firms are currently in the midst of close inspection by the government.
Smartphone brand vivo, owned by BBK Electronics, saw employees arrested and had its offices raided by Indian officials for money laundering charges. Rival and fellow Chinese vendor Oppo also saw raids. Chinese apps have also been banned in India with over 300 pulled from official digital stores.
Xiaomi assembles smartphones in India with local and imported parts, and argues lower import tariffs are needed as it requires critical components from China. The letter also called for lower import charges on sub-parts used in batteries, USB cables and phone covers to improve the competitiveness of India’s manufacturing sector.
Increased scrutiny on Chinese companies stems from a 2020 border clash between China and India, which has led to disruption in investment plans from Chinese companies.