Strained relations between China and India fail to cut off Xiaomi

Chinese smartphone giant rolls out plans to boost production in world’s largest democracy

Border clashes between China and India have failed to dent Xiaomi’s presence in the world’s largest democracy.

The Chinese high-tech group plans to expand its production of smartphones and smart televisions in the country after tieing up deals with suppliers BYD and DBG.

“With these two new smartphone manufacturing partners, we now have a presence across northern and southern parts of the country,” Manu Jain, the managing director of Xiaomi’s India operation, said.

Still, the news of the expansion came just two weeks after India and China announced they were pulling their troops back from the disputed Himalayan border between the two nations. 

In May, a tense standoff in the Karakoram mountains erupted into violence. Hand-to-hand combat with clubs left 20 Indian soldiers dead.

The facts:

  • Xiaomi is the top-selling smartphone brand in India.
  • Last year, the Chinese company’s market share was 26%, according to research firm Counterpoint.
  • Xiaomi has tended to fly under the radar amid the row involving Huawei and its 5G operation.
  • Sanctions by the United States have hit Huawei sales.
  • Despite being added to the US blacklist in January, Xiaomi has continued to expand.
  • Even though sales growth slumped 7% in 2020, the firm made a profit of US$55 million.

What was said: “Now 99% of our smartphones and 100% of our smart TVs are manufactured in India and the majority of the components for smartphones will be locally manufactured or sourced from India,” Jain, the head of Xiaomi’s operation in the country, said.

Delve deeper: Xiaomi has become entrenched in India during the past five years and has rapidly grown in a highly-competitive market. To underline the challenge facing the firm, voice calls and data costs are ranked as one of the lowest in the world. 

China Factor comment: India has become a difficult environment for Chinese companies after the Himalayan border clashes. But Xiaomi has managed to thrive in the country by rolling out smartphones at a highly-competitive price.