Appoint Indian CEOs: Centre to Chinese smartphone companies
The central government has asked Chinese manufacturers dealing in smartphones to induct Indian equity partners for their operations in India, The Economic Times reported. They have also been asked to appoint executives of Indian origin in key roles such as chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO), and chief technical officer (CTO).
Why does this story matter?
Ties between India and China have been severely strained since the 2020 border clash between the two countries in Ladakh's Galwan sector. Several Chinese smartphone manufacturers have been under scrutiny from the Indian government for alleged tax evasion and unlawful remittances worth thousands of crores. These issues were reportedly relayed to OPPO, Xiaomi, Vivo, and OnePlus, among others.
Chinese firms asked to increase local manufacturing, ventures
Furthermore, Chinese companies such as Xiaomi, Oppo, and Vivo have been asked to appoint Indian contract manufacturers, increase local manufacturing down to the component level through joint ventures with Indian businesses, expand exports from the country, and have local distributors. The government has also ordered them to guarantee legal compliance and not avoid taxes in India.
Centre wants Chinese companies to tap local talent
According to the ET, the new rules for Chinese firms were directed by the Ministry of Electronics and Information Technology (MeitY). It was communicated to the Chinese mobile firms in a meeting with India Cellular and Electronics Association (ICEA). The Centre wants these companies to take advantage of local talents and make India their export and production base.
India's new PLI scheme for IT hardware
Last month, the Centre had also approved the Production Linked Incentive (PLI) Scheme for IT Hardware to encourage investments and improve the capability of Indian enterprises. The PLI plan would cost Rs. 17,000 crores over a six-year period. Reportedly, the expected investment in the telecom PLI was around Rs. 900 crore, but the actual investment was Rs. 1,600 crore.
