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Xiaomi Pushes For Smartphone Component Suppliers To Invest In India
China’s Xiaomi says wanting its global smartphone element makers to set up base in India, which is likely to bring as much as $2.5 billion of investment to the South Asian nation while also creating up to 50,000 jobs.
Xiaomi’s push can increase Prime Minister’s Narendra Modi’s flagship ‘Make in India’ drive that is aiming at adding tens of the millions of new jobs and turning Asia’s No.3 economy into a global manufacturing hub.
Xiaomi which looks heading for a big initial public offering later this year. Currently, it has six smartphone manufacturing plants in India. It is hosting more than 50 of global suppliers in New Delhi at an investment summit on Monday that was also attended by the key government officials.
If the suppliers at the summit were to set up shop in India, a top market for the Xiaomi, it will bring in $2.5 billion in the investment and create as many as 50,000 jobs, the company says.
The Chinese firm has to unseat a Korean rival Samsung Electronics to take the pole position in India’s smartphone market that is the world’s second biggest.
Xiaomi, which begins the assembling smartphones through Foxconn in southern India in the year 2015, will now assemble parts like memory and processors on printing circuit boards locally, says Manu Jain, managing director of the Xiaomi’s India operations.
“Today we are deepening this commitment with the three more smartphone factories and our first surface-mount technology plant that is dedicating towards local manufacturing,” Jain says in a statement.
The SMT is a method by which components are embedding onto the printing circuit boards. Once populated with the elements, PCBs that house memory, chips, and other parts, typically account for about half the cost of a smartphone.
This announcement comes a week after in New Delhi levy a 10 percent import duty on some key smartphone components, including populating PCBs. The South Asian nation is Xiaomi’s second-largest market after China.
Xiaomi’s SMT plant will run by Taiwan’s Foxconn, the world’s largest contract electronics manufacturer, and a key Apple supplier.
However, Xiaomi’s push to get the suppliers to India can spark job loss concerns in the neighbor China that is currently among the top electronics manufacturers in the world.
“India’s cheap labor offers more competitiveness to the manufacturers, demand is vast and in India opportunity is also big because the market is much less saturated comparing to China,” says Jaipal Singh, a senior market analyst for the client devices at a tech research firm International Data Corporation.
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