Need to nurture and develop Indian companies, smartphone industry working very harmoniously: ICEA

After cracking down on Chinese mobile phone companies over alleged tax evasion, Bloomberg reports that the government is considering a ban on Chinese firms from selling their smartphones for below Rs 12,000 in the Indian market.

The move is believed to be intended at promoting local smartphone brands. CNBC-TV18 reached out to the government for clarification, and sources say there is currently no such proposal under consideration.

To date, Chinese companies hold nearly 66 percent of the share in India’s smartphone market. According to a report by Counterpoint Research, Chinese smartphones make up 80 percent of the sub-Rs 12,000 smartphone segment, while Indian companies hold only three to four percent.

Are Indian smartphone makers ready to grab the huge market share held by Chinese companies? Will a ban hurt more than help? To discuss this, CNBC-TV18 spoke to Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association (ICEA); Madhav Sheth, Vice President and India CEO of Realme and Hari Om Rai, Chairman and MD of Lava.

According to Mohindroo, the industry is seeing a very relentless thought process in the government that each sector should have a presence of Indian companies, and that it is important to nurture them and develop them.

He added, “The industry is not divided between Indians, Americans, Chinese, there is no division like that. It is a division in the mind of the media perhaps and that is how it is reported. All the companies from China are producing in India. What has unfortunately happened is that the Indian companies have not performed up to expectation and there was a major shrinkage in their market share and that is a matter of great concern.” He said the industry runs very harmoniously.

While he appreciated the deep determination of the government to build Indian companies in this sector, both in the brands and in the supply chain. He also stressed that the Chinese supply chain is a critical part of the global smartphone ecosystem and the global electronic ecosystem.

Sheth said, “To be honest, I am not at all worried at this point in time. The reason is, that this has just, I believe, some sources, which have not been confirmed yet, and we have been talking to the authorities very closely, and we know the intention is very clear.”

Sheth added that their entire ecosystem right 100 percent manufacturing in India. They have helped to bring about 60 to 70 percent of the component ecosystem manufacturers to India.

Rai said, “The country is looking at building large companies and our companies got destroyed because of certain, I would say not so fair play, which happened because of the — capital burn also happened in the last three to four years. So, therefore, the government is considering a lot of things, that how can we rebuild.”