Xiaomi invites global suppliers to set up local manufacturing base
Newdelhi: china-based electronics and software company Xiaomi has urged its global smartphone component suppliers to look at investments in India, with an aim to set up a local components ecosystem here.
The company is hosting 50-odd suppliers, which manufacture components such as touch panels, camera modules and LCD and LED panels for it, for a three-day tour of Uttar Pradesh and Andhra Pradesh to explore investment opportunities.
If all the suppliers set up base in India, “we believe this could the biggest ever investment into India .... to the tune of Rs15,000 crore, and could possibly create 50,000 additional jobs in India,” Manu Jain, V-P of Xiaomi Global and managing director of Xiaomi India, said at the firm’s first ever Supplier Investment Summit in New Delhi on Monday.
Xiaomi also announced setting up of its first surface mount technology plant for local manufacturing of printed circuit board (PCB) assembly units, at Sriperumbudur, Tamil Nadu, in partnership with Foxconn.
“We are starting an SMT line for PCB assembly... one of the key challenges that the Indian electronics industry faces is that the local value addition is about 10% of the industry. PCB is the most important component of the phone and accounts for 50% of the value of the phone,” Jain said, adding the company aims that by the next quarter, all of Xiaomi phones assembled in India will have a locally manufactured PCB.
The announcement comes immediately after the government on April 2 imposed a 10% basic customs duty on import of smartphone components such as camera modules and PCB assemblies.
Moreover, in the budget for 2018-19, the centre had increased customs duty on mobile phones to 20% from 15%. The measures are in line with the government’s Phased Manufacturing Programme, which aims to boost local manufacturing of phones.
In its first phase, the government had targeted production of various components for three years—mechanics, die-cut parts, microphones and receivers, keypads and USB cables in 2017-18; printed circuit boards, camera modules and connectors in 2018-19; and display assemblies, touch panels, vibrator motors and ringers in 2019-20.