Xiaomi Doubles Down on Its 'Make in India' Plans

Xiaomi Mi 7 has in-display fingerprint reader

Soon after the commencement of its first Supplier Investment Summit in India today, the Chinese manufacturer announced three new smartphone manufacturing plants in India. The company started with its first smartphone factory back in 2015 in partnership with Foxconn which led to a second plant in 2017 and the power-bank factory in association with Hipad Technologies.

Xiaomi said that if all its suppliers set up shop in India, that could bring investments worth over $2.5 billion into the country and create as many as 50,000 jobs. Xiaomi additionally said that all of the assembly works are done by women. Xiaomi also setup it's printed circuit board (PCB) manufacturing facility in India.

Xiaomi is also setting up a new printed circuit board (PCB) assembly unit in Sriperumbudur in partnership with Foxconn. To date, over 95% of Xiaomi smartphones sold in India are made in India, the company claims.

Commenting on the development, Manu Kumar Jain disclosed that the company already had two manufacturing plants for the manufacture of smartphones in India.

Xiaomi has only been in India since 2014 but it broke Samsung's (SSNLF) six-year dominance of the world's second-largest smartphone market in the quarter ended December.

Recently the government imposed an added 10 percent tax on import of smartphone components to boost local manufacturing. All three of these smartphone plants are built in partnership with Foxconn and are located in Sri City, Andhra Pradesh and Sriperumbudur, Tamil Nadu, with a total area of 180 acres.

"In 2015 we extended our long-term commitment to the Indian market by joining the "Make in India" program". With this, one could expect the prices of Xiaomi smartphones to go down as the PCB is one of the most important components of the smartphone, and contributes to almost 50 percent of the value of the phone. BCD on populated PCBs, camera modules and connectors, will push local assembly or manufacturing of these components, as companies who make here will get a price advantage over those who don't.

"In the last four years, we have scrapped several rules, regulations, and procedures for investors like Xiaomi and others to come and invest in India", Kant said on the occasion.

China's Xiaomi said it wants its global smartphone component makers to set up base in India, Reuters reported.

With an overall market share of 26.8% (as per Q4 IDC Quarterly Smartphone Tracker 2017), Xiaomi is the number one player in the online smartphone segment with 57% market share and the number two player in the offline space, with 11.2% market share. Manu writes: "If all of them invest in India, it could potentially mean ₹15K Cr investment".