Chinese smartphone makers to set up factories in India

Workers inspect motherboards on a factory line at the Foxconn plant in Shenzen. The Taiwanese company, which manufactures Apple’s iPhone in China, revealed plans to create 10 to 12 factories and up toShow more

Smartphone makers based in China are leading the way with plans to set up manufacturing facilities in India.

The Indian government this month cleared a proposal for Huawei Technologies, one of China’s biggest telecoms companies, to set up a manufacturing unit in Tamil Nadu, south India.

Foxconn, the Taiwanese company which manufactures Apple’s iPhone in China, last week revealed plans to create 10 to 12 factories and up to 1 million jobs in India by 2020.

There is a push by Narendra Modi’s government to transform India into a manufacturing powerhouse, which would involve it competing with countries such as China.

Xiaomi, China’s largest smartphone manufacturer, also plans to produce phones in India.

Smartphone growth has shifted from China to India, according to a recent report by HSBC.

“As the domestic market has become saturated, Chinese brands have been trying to expand overseas,” it said.

It added that growth of global smartphone sales is slowing but India is predicted to experience an increase by 26 per cent as a compound annual growth rate between 2014 and 2019, while China would have an annual growth rate of 5 per cent over this time period.

“Chinese smartphone brands accounted for 7 per cent of total India smartphones in 2014 and we expect this will grow more than 100 per cent year on year this year.”

Indian smartphone manufactures source many of their components from China.

Local press reported that Foxconn had already started production of its smartphones in India in the south-east state of Andhra Pradesh as Foxconn’s billionaire chairman, Terry Gou, visited India last week.

Mr Gou has cited India’s lacking infrastructure as a major hurdle to the county’s ambitions to expand its manufacturing sector.

Follow The National's Business section on Twitter