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It
is another key win for Prime Minister Narendra Modi's efforts to
turn his country into a manufacturing powerhouse with his "Make
in India" campaign and comes on the heels of a separate
announcement by Foxconn to invest $5 billion in an electronics
manufacturing facility.
A lack of good infrastructure and suppliers have hampered
efforts to manufacture smartphones in the country, forcing most
of India's more than 100 different phone companies to obtain
their products from China and Taiwan.
An assembly line in the southern state of Andhra Pradesh will,
from Monday, begin rolling out Xiaomi's first locally made
smartphone, the Redmi2 Prime, company executives said.
The Indian market, which Xiaomi entered in July last year, has
fast become its second-largest market as the company's
low-priced, feature-rich phones find favor with young and
cost-conscious customers.
In the April-June quarter, Xiaomi ranked seventh in terms of
smartphone shipments in India - a segment that is dominated by
Samsung Electronics Co Ltd and India's Micromax Informatics Ltd,
according to Counterpoint Research.
Apart from the tax benefits of making in India, the facility
will help Xiaomi better manage inventory and reduce lead times
from three to four weeks to under two weeks, said Manu Jain, the
company's India head.
"Over time, most Xiaomi phones sold in India will be made in
India," Jain said. He added, however, that it was too early to
say whether the company would use the facility to export
devices.
Xiaomi declined to reveal the size of its investment in the new
assembly line or planned production capacity.
The assembly line marks a return for Foxconn, officially known
as Hon Hai Precision Industry Co, to the Indian market. The
world's largest contract electronics manufacturer was forced to
shut up shop in Asia's third-largest economy last year after
client Nokia stopping making phones at its plant.
Foxconn, a key supplier to Apple Inc, is keen to exploit
investment opportunities in India and on Saturday signed a pact
with Maharashtra state to invest $5 billion over five years on
an electronics manufacturing facility.
(Reporting by Aman Shah; Additional reporting by Nivedita
Bhattacharjee; Writing by Sumeet Chatterjee; Editing by Edwina
Gibbs)
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