As Chinese companies have seized a sizable portion of the phone market, the government is actively planning methods to restore the domestic mobile device industry.
According to a senior government official acquainted with the plans, the goal is to reduce competition from Chinese mobile players in the entry-level or sub-Rs 10,000 categories.
While the plan is still being discussed, the government is concluding a program in that only domestic companies should be allowed to compete at the lower end of the market, according to the official.
This is part of the plan to create “Indian champions”—a key objective in the production-linked incentive (PLI) scheme.
The execution of the strategy could either be through an enabling framework or negotiation, a high-level source in the know said.
The source previously quoted noted that, among other things, the domestic mobile device business can be resurrected by encouraging international firms to establish Indian electronic manufacturing services (EMS), co-develop, and co-design inexpensive phones with homegrown brands.
He said, "We are also exploring how we can help them interact and bring business and opportunity for Indian businesses because Indian and foreign brands deal with distinct areas of the market.
The PLI program, in which numerous local firms for the production of mobile devices, including Lava, Micromax, Padget Electronics, and UTL Neolyncs, had participated, has not program taken off.
To compete with Chinese firms, which are purportedly on a subsidy binge, Indian businesses have had a difficult time.
Analysts claim that they have also failed to establish themselves as mobile companies' contract makers.
They are unable to produce enough as a result to accept the inducement.
According to Bloomberg, sales of smartphones priced under $150 made up a third of India's total sales for the three months ending in June 2022, with up to 80% of these shipments coming from China. It used data from Counterpoint.
Numbers from TechArtseveral, which also measures market share, showed how Indian brands were declining.
Indian brand shares decreased from 21% in 2017 to just 3% in 2020 (the market is defined as Chinese and Indian brand shares, with the remaining brands excluded).
The market share of Indian brands in 2021 for smartphones was approximately 1%.
Investigation authorities have also focused their attention on Chinese mobile phone manufacturers, alleging several breaches, including money laundering.