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 The green light from the Ministry of Home Affairs, confirmed by an
official on Wednesday, comes 19 months after Huawei first applied
for a manufacturing licence, amid wrangling over national security
concerns. It also marks a significant boost for Prime Minister
Narendra Modi's 'Make in India' campaign.
India has 975 million mobile phone subscriptions in a fast-growing
market. Close to 150 million subscribers use mostly imported,
Internet-friendly smartphones, a number that's forecast to grow
about 26 percent annually until 2019, according to a recent HSBC
report.
"India is an important overseas market for Huawei," Allen Wang,
president of Huawei's consumer business group in India, told Reuters
on Wednesday. "We aim to become a top three brand in India within
three years."
A spokesman for Huawei in India said separately the firm had not
received official communication from the government, and declined to
comment further.
Pending final approvals, Huawei would become the first big-name
Chinese phone maker to manufacture hardware in India's growing
market to helping compensate for slowing growth at home. Xiaomi Inc
[XTC.UL], China's leading smartphone, maker earlier this month
reported a sequential drop in half-year sales.
Huawei already has research and development operations in India, and
manufactures for export in the southern state of Tamil Nadu. Setting
up local research and production centres is seen as key to helping
Chinese firms offer top-end features at even lower cost to India's
price-sensitive consumers.
The green light for Huawei comes two months after Prime Minister
Modi visited China in an effort to promote stronger business ties.
China's ambassador to India told Reuters earlier this year that
tough security reviews and visa restrictions were slowing
investment, despite Modi's promise to roll out the red carpet to
foreign business.
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India has been a testing ground for Chinese firms like Lenovo Group
Ltd and others, trying out new products and strategies. Chinese
producers are beginning to win market share from better-known rivals
such as South Korea's Samsung Electronics Co and homegrown supplier
Micromax.
Foxconn, the Taiwanese tech group that assembles the Apple Inc
iPhone in China, is also looking to open 10-12 plants in India by
2020 and is in talks to manufacture the iPhone in the country.
(Reporting by Douglas Busvine in NEW DELHI, Devidutta Tripathy in
MUMBAI and Yimou Lee in HONG KONG; Editing by Clara Ferreira Marques
and Kenneth Maxwell)
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