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Oppo India to expand investments amid government scrutiny

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Amid the Indian government’s increased scrutiny against Chinese smartphone makers, Oppo still decided to expand investment and strengthen the manufacturing ecosystem in India.

Economic Times and Canindia News reported that Oppo announced the Vihaan project in India and will invest US$60 million in the next five years to strengthen the local supply chain by empowering micro, small and medium enterprises and encouraging about 30 Tier-1 suppliers to set up operations there, in a bid to expand Oppo’s local export capacity to US$5 billion.

Furthermore, Oppo will focus on developing next-generation technologies such as 5G and AI to accelerate the product development process in India.

Vivek Vasishtha, vice president of public relations at Oppo India, said that with a robust local supply chain getting established, it is the right time to promote exports of Oppo’s made-in-India smartphones to identified markets. Before the Vihaan project, Oppo had invested INR24 billion (US$3.03 million) to set up a large factory in Greater Noida, Uttar Pradesh, and established a 5G innovation laboratory in Hyderabad, Oppo’s first outside China.

In March, Bloomberg quoted sources as saying that Xiaomi, Oppo, and Vivo are discussing with India’s contract manufacturers eligible for the mobile phone manufacturing incentive scheme in India, hoping to take advantage of cash incentives available to the local firms and expand export capacity. Oppo and Vivo are talking with Lava International, and Xiaomi is courting Dixon Technologies.

Despite being the second largest mobile phone producer, India ranked only 10th in the world in 2021 by mobile phone export values, with a large portion of capacity used to meet domestic demand according to Trademap data. However, amid global supply chain relocation in recent years, more and more companies, including Apple, are diversifying their supply chain to strengthen supply chain resilience, with India one of their priorities.

On the other hand, Chinese smartphone manufacturers are now facing tough regulatory challenges in India. In January, India asked Xiaomi to pay INR6.53 billion in import taxes it found Xiaomi evaded. In July, India froze multiple accounts of Vivo on alleged tax evasion and raided Oppo alleged for INR43.89 billion custom duty evasion. It is worth noting that it was Oppo India’s vice president of public affairs to speak on the Vihaan project.

Canalys, in its latest smartphone market tracker, said that Vendor activity remained muted in the second quarter due to falling demand and government scrutiny of Chinese manufacturers.

Mobile phone export value by economies (US$ mln)

Exporters

2017

2018

2019

2020

2021

China

127,266

141,684

125,302

126,086

147,098

Vietnam

29,647

31,125

34,151

31,090

39,541

Hong Kong

23,862

31,429

30,720

27,455

32,284

USA

11,928

10,511

10,142

9,607

12,637

Germany

5,690

5,369

5,157

6,025

5,650

Czech

3,785

6,451

6,707

6,502

5,431

Singapore

4,499

4,672

4,694

3,974

5,323

UAE

14,317

16,148

17,808

17,152

5,021

South Korea

6,973

6,121

4,744

4,123

4,926

India

138

1,094

3,406

2,989

4,872

Source: Trademap. Compiled by DIGITIMES Asia, August 2022