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Handset makers, retailers divided over essential tag, offline availability in India

Mobile phone handset makers and retailers are divided over how the government should treat their segment which has suffered huge losses due to the coronavirus-led nationwide lockdown.

Handset makers have sought the backing of the Prime Minister’s Office (PMO) for their suggestion that mobile phones should be put in the category of ‘essential items’ and their sales allowed in brick-and-mortar shops. But retailers are not in favour of resumption of offline sales amid the Covid-19 outbreak.

Instead, they have suggested that the government come up with a stimulus package to rescue the country’s nearly 30,000 mobile phone sellers from bankruptcy, saying that retail business is already on a ventilator.

The All India Mobile Retailer Association (AIMRA), which represents 150,000 such retailers across the country, has written to commerce minister Piyush Goyal to not consider mobile handsets as essential items.

“We did not request you to change the category of mobile phones to essential items…,” Arvinder Khurana, national president, AIMRA said in an April 23 letter to Goyal. “Human life is more precious than mobile phones getting converted into essential items.”

Khurana said the association doesn’t want to expose mobile retailers and customers to risk of contracting Covid. “But we are ready to serve the customers by doorstep delivery,” he said.

Earlier this week, India Cellular and Electronics Association (ICEA) and Confederation of All India Traders (CAIT) had written two separate but identical letters to home minister Amit Shah and Goyal, urging the government to include handsets under essential items and allow their sale and service through offline stores.

ICEA represents handset makers such as Xiaomi, Oppo, Vivo, Apple and Lava, and contract manufacturers including Foxconn and Wistron. Sales of these companies have plunged amid the nationwide lockdown. CAIT represents 70 million traders and 40,000 trade associations in India.

But on Friday, CAIT ditched ICEA to back AIMRA’s view that offline handset shops should be allowed to open during the lockdown period.

“It has been decided unanimously by the trade leaders of different states of the country that in view of the multiplication of Covid-19 cases each day , the commercial markets should be open only when threat of Covid pandemic is completely over…any hasty decision of lifting the lockdown may result in further worst period for the country and therefore the government should take a decision by deeply analysing all pros & cons of lifting or continuing the lock down,” CAIT Secretary General Praveen Khandelwal told ET.

AIMRA, in a separate letter dated April 23, urged finance minister Nirmala Sitharaman to provide a stimulus package, including salary support, relaxation in rental, bank credit and other fee waivers to rescue some 30,000 sellers from bankruptcy.

The letter said survival of mobile phone retail businesses is not possible without intervention from the government, and a stimulus package is a must to prevent job losses in the sector which is already marred by unethical competition from ecommerce players.

“The mobile retail business is already on a ventilator, where sales of most shopkeepers had reduced by 70%. More than 30,000 mobile phone retail outlets have been shut down in the past one year itself, and thousands are on the verge of closure,” AIMRA said.

―Telecom Techie

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