Xiaomi announced that Holitech Technology, one of its main component suppliers, will start component manufacturing in India.
Holitech Technology has signed an MoU with the state of Andhra Pradesh and will start local manufacturing in the city of Tirupati for Xiaomi.
India’s number 2 smartphone brand said Holitech Technology will make an investment of nearly $200 million over three years in India. Xiaomi lost its number one position in the Indian smartphone market to Samsung in the latest quarter.
It would be the first manufacturer in India manufacturing Compact Camera Modules (CCM), Thin Film Transistor (TFT), Capacitive Touch Screen module (CTP), Flexible Printed Circuits (FPC), and fingerprint sensor locally.
The local manufacturing is likely to start by Q1 2019. It aims to generate 6,000 jobs in three years.
The component manufacturing plant will start mass production with production capacity of nearly 50 million each component per year.
India has imposed a 10 percent tax on imports of key smartphone components, including populated printed circuit boards, in April as it moves to step up local assembly of mobile devices.
Indian telecom regulator TRAI last week announced its recommendations to boost telecom equipment manufacturing in India.
Andhra Pradesh has extended incentives for setting up the manufacturing plants in terms of tax, land and power subsidy along with several other incentives, Flame Chen, co-founder and CEO, Holitech Technology, said.
“Our infrastructural offerings make Andhra Pradesh an exciting investment opportunity and it is heartening to see Holitech Technology come to the state and initiate a big revolution in the market for local manufacturing,” Nara Lokesh, minister of Information Technology, Andhra Pradesh said.
Xiaomi in April said that it wanted its global smartphone component makers to set up base in India, in what could potentially bring as much as $2.5 billion of investment and create as many as 50,000 jobs, Reuters reported.
“A new era of local manufacturing will begin with several job creations and other component manufacturers also coming in,” Manu Jain, managing director of Xiaomi India, said.
