HMD Global, the Finnish startup with exclusive license to sell Nokia-branded mobile phones and tablets, globally, is planning to expand its local manufacturing efforts in India. At the sidelines of the launch of new Android smartphones, the company executives detailed their plans to start local manufacturing of all components.
HMD Global, like many other smartphone brands, imports mobile phone components and assembles them in India. The company has a partnership Taiwanese contract manufacturer Foxconn for the local assembly of its mobile phones. However, it now plans to start locally manufacturing some of the components that go into the design and development of its mobile phones. The company says it plans to execute this move in a phased manner and will switch to manufacturing all components in India by 2022.
“Until this year, we imported all our components and assembled them here. Now we will be manufacturing some of the components in India as well… next year more, and the year after that even more. It’s going to be a phased manner in which we start switching to component manufacturing also,” Ajey Mehta, vice-president India, HMD Global told The Mint.
The move is partly based on new regulations where the Union government introduced new plans to boost local manufacturing. As part of the effort, the government of India imposed a 10 percent basic customs duty on import of smartphone components such as camera modules and printed circuit board (PCB) assembly. Before the introduction of this union budget, the government did not impose any import duty on these components.
Under Make in India initiative, the smartphone makers have set up their own assembly units but they are still far away from manufacturing these devices. In order to manufacture an electronic device, the manufacturing of essential component needs to catch up first and the new announcement paves way for local manufacturing of components in addition to local assembly of these devices.
In the budget for the financial year 2018-19, the government also increased customs duty on mobile phones from existing 15 percent to 20 percent. Finance Minister Arun Jaitley said the measures are part of government’s Phased Manufacturing Programme with the first phase focusing on boosting local manufacturing of components. Mehta told the publication that HMD Global is working with Foxconn to ramp up manufacturing of PCBs in the country. He added, “A few things will continue to be imported, but almost the entire component ecosystem will start to set up in India.”
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After the release of union budget, the industry stalwarts appreciated the hike in customs duty and introduction of import duty on mobile components but they also made it clear that the government should help companies manufacturing components to set up local units if it really aims to extend the ‘Make In India’ initiative. HMD Global is also said to be in talks with the government for its support for the mobile components ecosystems. Most smartphones sold in India use processors made by Qualcomm or MediaTek and camera modules made by Sony or Samsung.
The details regarding HMD Global’s local manufacturing efforts came on the sidelines of new product announcement. The company launched Nokia 6 (2018), Nokia 7 plus and Nokia 8 Sirocco at an event in New Delhi. The Nokia 6 (2018) goes on sale from April 6 while Nokia 7 plus and Nokia 8 Sirocco pre-orders begin from April 20. The new products were first showcased at Mobile World Congress in February and have been launched in India as HMD Global aims to capture significant market share in the world’s fastest-growing smartphone market.