Xiaomi plans to expand manufacturing in India, seeks more tax incentives from govt

Chinese major Xiaomi, which is already the largest seller of mobile phones and smart TVs in the Indian market is now planning to expand the scope of its manufacturing operations in the country, as per a Financial Express report. The plans include making in India and exporting from India. However, the company feels there some anomalies in the Indian tax structure etc. and wants the government to clarify these.

Xiaomi’s smartphones are being assembled by Foxconn at its large facility in Sri City, on the border between Tamil Nadu and Andhra Pradesh on the AP side. There’s one more facility in Tamil Nadu, in Sriperumbudur. This facility is spread over 30 acres and Foxconn employs around 15,000 people in this facility, of which 87% are women. These women mostly belong to AP, Tamil Nadu and Odisha. Xiaomi claims it is making three phones every second. Some of the phones are already being exported by neighbouring countries like Bangladesh and Nepal but the volumes are still very low.

The plan that Xiaomi is now contemplating is to extend this local manufacturing to other products that it has introduced in the Indian market; these include wearables, purifiers etc.

If the company has to export some of its products from these facilities to other markets, especially, the developed ones like Europe, it wants the Indian government to work on certain issues. For example, Indian products are certified under the Indian standards BIS. But BIS holds no value in Europe. It is for the Indian government to take up such issues with the governments in Europe and sort out.

Xiaomi is enjoying a share of around a third of the market in the smartphones category as well as in the smart TV segment. Its share in the fitness tracker is reportedly higher, at around 39%.

The Chinese company is said to have sold over 12 million devices in the festival sale period just gone by, September 28 to October 29. This the company says is 40% year-on-year. Xiaomi is reported to have sold over 600,000 smart TVs during the same one-month period. Again this has to be understood in the perspective that the estimated smart TV market in the country is only around 400,000.

Xiaomi is trying to encourage the manufacture of components also in the country and in this context, an international component making company, Holitech Technology has already setup shop in the country.