India considers restricting low-cost Chinese phones

Being kicked out of the Indian market would be hugely damaging for Xiaomi and other Chinese phone brands. (Artwork – Photo: Reuters)

According to Bloomberg , India is seeking to restrict Chinese companies from entering the market for phones priced below $150 each, in order to create competitive opportunities for domestic companies.

The move could be a blow to Chinese companies like Xiaomi. The plans coincide with growing concerns in India about Chinese brands offering cheaper prices than local smartphone makers.

According to Bloomberg, it is not yet clear whether the Indian government will announce policies or use unofficial channels to carry out blocking of Chinese smartphone manufacturers.

Chinese companies make up the bulk of the low-end smartphone market, which is popular among users shifting away from traditional phone devices in the world’s second-largest mobile market, India.

Indian companies like Lava and MicroMax quickly gained popularity after launching more than a decade ago, but since then the companies have been losing market share to stiff competition from Chinese rivals.

At their peak in 2015, Indian smartphone brands Lava, Micromax, Intex and Karbonn accounted for a combined 35% market share in the world’s second most populous market, but now that number has dropped to just under. first%.

Being excluded from India’s low-end market would hurt Xiaomi and other Chinese phone brands, which are increasingly dependent on India for growth while its home market. they are affected by the COVID-19 control blockades, reducing consumption.

According to market research firm Counterpoint, smartphone models priced under $150 contributed to a third of total smartphone sales in India in the second quarter of 2022, of which Chinese companies accounted for 80% of the market share.

Shares of Xiaomi on the Hong Kong stock exchange fell as much as 3.6% in August 8 trading, bringing this year’s decline to more than 35%.