US-China Trade War Brings Opportunities for Indian Handset Makers

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    The US-China trade war has started benefitting India. First time in history, US Teleco will use devices made by Indian manufacturers. This development brings hope for other Indian handset makers and shown a path of light in the ongoing hard time for India-based players survival.

    By
    BHUPESH RASEEN
    Chairman-Mobile Advisory Committee, TMA
    Board Member-Ghana India Trade Advisory Chamber (GITAC)

    China do want to control the wireless technology of the world. No one know about what backdoor access points exist in their 5G network that they will exploit. People would be happy with 4G until a 5G from the European and USA technology experts is available. Now excellent opportunity for USA to strengthen ties further with India. USA should involve India in its all strategy consideration related to Central Asia, Gulf/Middle East and Indo-Pacific. Huawei is at the centre of a geopolitical tug-of-war between China & the United States. U.S. President Donald Trump’s administration put the company on a blacklist in May, citing national security concerns.

    The US-China trade war has started benefitting India. First time in history, US companies which operate mainly in handset bundling model and source devices from China will use devices made by Indian manufacturers. US Teleco major AT&T along with rivals T-Mobile and Sprint have placed smartphone orders worth around Rs. 2,500 crore to Indian brands Lava and Micromax due to Sino-US trade tensions.

    These 4G phones will be under the sub-$200 category. The devices ordered are expected to be branded as AT&T & other respective Teleco’s brand under the contract manufacturing clause. Indeed first time in history, US companies which operate mainly in handset bundling model and source mobile handset devices from China will use mobile handset devices made by Indian manufacturers.

    The order offers some revenue relief to both Lava and Micromax as well, whose smartphone assembly plants are under-utilised. Both Lava and Micromax are likely to assemble parts sourced from China and expected to begin adding more and more value locally, possibly about 30-40% by the end of the year.

    This development brings hope for other Indian handset makers and shown a path of light in the ongoing hard time for India-based players survival. This planned arrangement of manufacturing budget segment phones for other telecom carriers can be seen as a positive move by the Indian handset makers, since this allows them to find some avenues of growth and help sustain the operations in presence of the relentless aggression by China-based brands.

    US companies are scouting places outside to assemble smartphones. This can come as a new life for these two Indian handset makers and pave way for other local players also. With Chinese companies dominating the smartphone market, Indian companies are left with few options such as exploring other consumer electronics or work as distribution arms of these giants. But this situation comes as a fresh air for Indian local players. It’s time for the local players to capitalize on this and work in the right direction.

    More than 250 companies from Taiwanese, Korean, American & Japanese are looking for a base shift to India from China due to the growing tensions amid US-China trade war which will create employment opportunities and contribute to the development in the country.

    Government need to promote investment in manufacturing of core components of mobile phones by offering various benefits to the investors to support manufacturing landscape of mobile phones. They further need to introduce favourable policies for the survival of Mobile Makers.

    The government intends to make India as the next electronics manufacturing hub & possibly bigger than China and position India as a better alternate manufacturing base for all OEMs. Therefore they need to introduce few more benefits, programmes and initiatives specially for Indian players to make them price competitive worldwide.