Xiaomi adds Indian assembler to revive local smartphone push

XIAOMI is handing some of its smartphone assembly in India to Dixon Technologies India, deepening its relationship with the homegrown partner as the country’s government pushes electronics manufacturers to build local supply chains.

The Chinese company has informed Prime Minister Narendra Modi’s government about the plan for Dixon to assemble and export Xiaomi smartphones, Rajeev Chandrasekhar, a technology minister in India, said late on Tuesday (May 30). The partners will also explore component manufacturing, Dixon said.

Xiaomi was once an unrivalled leader in India’s smartphone market, but lost steam after facing heightened regulatory scrutiny and stiff competition. Indian state agencies’ crackdown on Chinese firms including Xiaomi has led the companies to explore manufacturing alliances with local partners, possibly to win New Delhi’s favour.

Shares of Dixon advanced as much as 5.1 per cent in Mumbai.

A unit of Taiwan’s Foxconn Technology Group called Bharat FIH currently makes the bulk of Xiaomi’s smartphones in India. Xiaomi’s other suppliers in India include local units of China’s BYD Electronic International and DBG Technology.

Winning deals from big brands like Xiaomi is a boost for Indian contract manufacturers such as Dixon and Optiemus Electronics, which have ambitions to become global suppliers. Dixon already makes smart television sets for Xiaomi, and just days ago Xiaomi said Optiemus will make its Bluetooth neckband earphones – the first time an Indian supplier will make an audio product for the Beijing-based company.

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Xiaomi wants to increase sourcing from India, including key components such as display and haptic feedback modules, Muralikrishnan B, president of Xiaomi India, said in an interview last week.