ICEA wants bars raised for Chinese companies in Indian markets

The India Cellular and Electro­nics Association (ICEA), a leading organisation of mobile device and consumer electronics companies, has suggested discouraging new EMS (electronics manufacturing services) firms headquartered in China to operate in the country, saying this would lead to their dominating the supply chain.

A majority share of the components in making a mobile device comes from China.

The ICEA has suggested a Chinese EMS player setting up a manufacturing unit in India should have an equity cap of 24 per cent. It wants op­erating EMS companies in the country from China to bring down their stake below 49 per cent.

Justifying its stance, the ICEA in a presentation said the country had big global EMS players from Taiwan and the US, and home-grown players that could meet the requirements here and export, and there was no need for newer players from China.

The association wants Chinese mobile device brands ope­rating in India to assemble their phones from non-Chin­ese players and not encou­rage and nurture their firms in India.

Companies like Xiaomi use components of both Foxconn and Chinese EMS player DBG to make phones.

India has all the leading Taiwanese EMS players in the country, including Foxconn, world number one; Wistron; and Pegatron. Foxconn, for instance, apart from assembling Apple iPhones, makes phones for other players.

The US has its big players in India such as Flex and Jabil Inc, and Reliance has tied up with Sanmina of the US to make electronic products.

Chinese EMS players that have been in India before tensions between the two countries increased include BYD, DBG, and KHY.

EMS players like Huaqin, Longcheer and Wingtech, which collectively account for 75 per cent of the smartphone shipments globally, want to play a larger role in the country.

And there is home-grown Dixon Technologies, which assembles mobile devices, TV sets, laptops, etc.