Involve Indian firms, officials in your ops: Govt to Chinese smartphone cos

The Centre has asked Chinese mobile phone manufacturers to onboard Indian equity partners in their local operations, The Economic Times (ET) reports.

Additionally, the government has also asked these firms to appoint Indian executives to their senior leadership. The report quoted executives who attended the meetings where these directions were issued. 

Chinese smartphone maker firms have been asked to appoint Indian officials to posts such as chief executive officer, chief operating officer, chief financial officer, and chief technical officer etc.

Moreover, the government has also directed them to delegate contract manufacturing work to Indian companies, develop manufacturing processes that involve local businesses, and multiply exports from the country via local distributors, the ET report said.

At the meeting, it was also highlighted that Chinese companies comply with all the rules related to taxation and do not evade them, ET reported quoting the executives mentioned above.

Senior government officials issued these directions to a number of Chinese firms, including Xiaomi, Oppo, Realme, and Vivo. The meeting was organised by the ministry of electronics and information technology (MeitY). The report added that members from the India Cellular and Electronics Association (ICEA), which is the smartphone manufacturers' lobby group, were also present at the meeting.

The meeting was organised in the wake of several Chinese smartphone makers coming under the scanner for tax evasion and illegal remittances amounting to thousands of crores.

Offline mobile phone retailers have also been lobbying with the government to create a level playing field and take action against predatory discounts available for smartphones on online platforms.

People cited above said that the government want Indian equity partners not just in manufacturing but at all levels, which includes sales, marketing etc.

As things stand, Chinese smartphone companies have wholly owned operations in India. Speaking on the matter, Realme's president for international business, Madhav Seth, told ET that the government wants to change this situation and wants these companies to involve local talent and ecosystem and develop India as their export base.