Government asks Chinese mobile manufacturers to abide by the law, appoint Indian executives in key roles: Report

The central government has asked the manufacturers of Chinese mobile phones to include Indian equity partners in their local operations, as per a media report. Three executives, present in the meeting where the information was conveyed, said this. They also said that the government has also asked the companies to appoint Indian executives for the key leadership roles like Chief Executive Officers, Chief Operating Officers, Chief Financial Officers, and Chief Technical Officers.   

The media report also revealed that the government has directed the companies to appoint Indian contract manufacturers, expand local manufacturing down to the component level through joint ventures with Indian businesses, and hire local distributors. There are Chinese distributors for some of the companies, the report added.

The executives also said that the Chinese companies have also been conveyed not to evade taxes in India and to abide by the law.   

In recent meetings held by the Ministry of Electronics and Information Technology (MeitY), top government officials discussed these issues with Chinese companies including Xiaomi, Oppo, Realme, and Vivo. Manufacturers’ lobby group ICEA represents manufacturers, the report added.

The MeitY meetings came at a time when several Chinese smartphone manufacturers were under investigation for tax evasion and alleged illegal remittances worth thousands of crores. In addition to lobbying with the government, offline retailers have also sought to ensure that predatory online discounting does not occur.

In addition to manufacturing operations, the government is seeking Indian equity partners for sales and marketing. There are currently wholly owned operations of Chinese smartphone companies in India.