India’s top handset body has called on the government to create a special package to help revive local handset makers who have been pushed to the fringes in the market dominated by Chinese players besides Samsung on end,
and Reliance Retail’s JioPhone on the other.
“There is a compelling need to make a comprehensive strategic support framework to build large domestic companies to have the desired level of control on technology in strategic areas,” Pankaj Mohindroo, chairman at India Cellular and Electronics Association(ICEA), said in a statement issued.
The special package would help Indian companies tap the USD 250 Billion global opportunities in the entry-level smartphone segment, he said, adding that they will help create champion companies in India similar to what the US, China and South Korea did with their domestic companies.
ICEA, however, didn’t give specifics of what the special package should consist of.
Indian brands such as Micromax, Lava, Karbonn, and Intex, that had dominated the world’s second-largest market until some years back with Korea’s Samsung, are now struggling to survive in the local handset market. They fell behind the curve on adoption of 4G smartphones in the country, tapped into by Chinese players who now dominate the market with a combined share of over 50 percent. Meanwhile, JioPhone, a 4G feature phone, now commands a bulk of the basic phone segment, historically the strong point of Indian players.
The combined share of Indian brands’ in the smartphone and feature phone market has dropped to 8 and 14 percent, respectively in 2018 from 26 and 42 percent in 2016, according to CMR estimates.
Prabhu Ram, head-industry intelligence group (IIG), CyberMedia Research (CMR), said that the Indian players can tap the sub-USD 200 price category in the smartphone segment in India, Africa and Eastern Europe.
ICEA, which counts Apple, Foxconn, Xiaomi, Vivo, Oppo, Flex, Wistron and Lenovo, and all the domestic brands among its members, has also sought a 10- year tax holiday for these companies on a block of 15-20 years on all profits and gains under Section 80 IA of IT Act.
ICEA wants “allowance of zero-duty import of second-hand capital goods under the Export Promotion Capital Goods scheme to ease import of used equipment with at least 80 percent residual value while ensuring fast track clearance”.
The handset body said that it is critical to bring all major electronics ecosystems into India such as Apple, Samsung, Huawei, Oppo, Vivo, LG etc with their components value chain while developing Indian “champion”
“Companies such as Apple, Samsung, LG, Oppo, Vivo, Huawei and Foxconn will require a special plan and outreach that need to be identified as part of the vision document,” ICEA said in a recent letter to IT secretary Ajay Prakash