Chinese manufacturer BBK Electronics, the maker of Oppo and Vivo mobile-phone handsets, is likely to manufacture key components at its plant near New Delhi to cater to the Indian market.
The move comes in the wake of Indian government planning to impose duties on crucial parts of mobile phones from April 1, 2020. The government had initially planned to kick in the duties on February 1 this year, but postponed it after lobbying from foreign phone manufacturers, Business Standard reports.
BBK Electronics is expected to begin production of key components for Oppo and Vivo at its facility in Noida, near New Delhi.
The Indian government has been pushing for a phased manufacturing program (PMP) in order to convert the country into an electronics-manufacturing hub by making imports more expensive. Since 2017, it has increased customs duties on mobile-phone components, encouraging companies to manufacture these products locally.
The government has now added more components to the PMP list and wanted it to kick in this month to coincide with its interim budget. However, foreign phone manufacturers had argued that they were unprepared to make these components in India at such a short notice. Moreover, they also said it would affect their exports.
The postponement of the levy is expected to provide handset makers time to align their production plans with suppliers.
The Indian handset market is dominated by Chinese manufacturers, with Xiaomi leading the pack. Vivo and Oppo enjoy third and fourth positions respectively, while South Korean major Samsung is the second-largest seller of handsets in India.