India bullies Chinese smartphone firms with fresh crackdown
Published: Jun 14, 2023 09:59 PM
Customers experience Xiaomi products at a local Mi store in Gurgaon, India on August 20, 2019.

Customers experience Xiaomi products at a local Mi store in Gurgaon, India on August 20, 2019.

India has reportedly intensified a crackdown on Chinese smartphone companies operating in the South Asian country, which analysts said is bullying against Chinese companies by maliciously hyping so-called security threats.
It's only India's wishful thinking to replace China in global industry and supply chains over the next decade, despite the US-led economic "decoupling" from China, and India relies on Chinese smartphone firms to promote its manufacturing sector, experts said.
The Indian government has asked Chinese mobile phone makers including Xiaomi, OPPO, Realme and Vivo to bring local equity partners into their local operations and appoint Indian nationals in key roles such as CEO, Indian media outlet The Economic Times reported on Tuesday.
In addition, the Indian government has asked these Chinese firms to appoint Indian contract manufacturers to increase local manufacturing down to the component level through joint ventures with Indian businesses, and expand exports from the country and have local distributors, according to the report.
It said that Indian government officials communicated these issues at a meeting held by the Indian Ministry of Electronics and Information Technology (MeitY).
A source familiar with the matter told the Global Times on Wednesday that Xiaomi's headquarters haven't received such a request or notice from the Indian government. 
Both OPPO and Vivo declined to comment when reached by the Global Times.
"The MeitY may have disclosed the information on purpose, as the Indian side has had the idea for a long time, which was known among many Chinese companies in India," an India-based industry insider told the Global Times on condition of anonymity.
The insider said this measure is bullying against Chinese companies, as the Indian government wants to acquire Chinese companies in a disguised way.
On Friday, India's financial crime agency issued the so-called show cause notices under India's foreign exchange laws to Xiaomi for alleged illegal remittances of 55.51 billion rupees ($673.2 million), Reuters reported. The funds have been frozen by the agency since 2022.
"By maliciously hyping so-called security threats, India has launched crackdowns on Chinese companies, including spot checks, arbitrary penalties and cancellation of contracts. These moves have violated international rules and will lead to severe damage to India's business environment," Dai Yonghong, director of the Institute of China's Overseas Interests of Shenzhen University, told the Global Times on Wednesday.
India's moves reflect arrogance and complacency, according to Dai. The Indian side has overestimated the chance that the US-led economic "decoupling" from China will bring US and EU companies to manufacture in India. It's still a wait-and-see situation, given India's domestic problems including land and labor reforms, outdated infrastructure and sweeping protectionism, he said.
According to data from Counterpoint Research, Xiaomi had a smartphone market share of 16 percent in India in the first quarter of 2023 and OPPO had 12 percent. Realme had 9 percent and Vivo had 17 percent.
"While the Modi government has stepped up efforts to boost the development of India's manufacturing sector, it still can't achieve its goal in the mobile phone sector over the next decade without Chinese firms," Dai said, noting that Chinese companies have accumulated technologies and management experience for years to get where they're today.
Against the backdrop of a mounting crackdown on Chinese companies, they are particularly cautious about further investment in India. It was reported recently that Chinese fast-fashion retailer Shein is planning a comeback in India through a partnership with Reliance Retail.
"The partnership doesn't mean that Chinese companies are re-entering India. Even though the Indian government may loosen restrictions, there will not be a large-scale return of Chinese companies because they are increasingly cautious about investment in India," Hu Jianlong, founder of, a Chinese platform that serves domestic companies going global, told the Global Times.