India aims to restrict Chinese smartphones from the sub-Rs 12,000 phone market

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India to restrict Chinese smartphone makers from selling devices cheaper than 12,000 rupees ($150) to jump-start a faltering domestic industry that has hit brands including Xiaomi Corp.

The move is aimed to push Chinese giants out of the lower segment of the world’s second-biggest mobile market. 

Smartphones under $150 accounted for a third of India's sales volume in the June 2022 quarter, with Chinese companies accounting for up to 80% of shipments.

Xiaomi shares plunged in the final minutes of trading in Hong Kong on Monday. It fell 3.6%, extending its decline this year to more than 35%.

Chinese firms operating in the country, such as Xiaomi and its rivals Oppo and Vivo, have already been subjected to close financial scrutiny by New Delhi, leading to tax demands and money laundering allegations.

The government has previously employed unofficial means to boycott Huawei Technologies Co. and ZTE Corp. telecom equipment. 

The move shouldn`t affect Apple Inc. or Samsung Electronics Co. which price their phones higher. Representatives from Xiaomi, Realme and Transsion didn`t respond to requests for comment.

India has banned more than 300 apps, including WeChat & TikTok, as relations between the two countries fray. India amped up pressure on Chinese firms in the summer of 2020 after a deadly border clash.

India has banned more than 300 apps, including WeChat & TikTok, as relations between the two countries fray. India amped up pressure on Chinese firms in the summer of 2020 after a deadly border clash.

China's dominance in the Indian smartphone market has been criticized. Recurring annual losses posted by most Chinese handset makers in India add to criticism of unfair competition from India's leading brands.

Separately, the government continues to ask Chinese managers to build local supply chains, distribution networks and exports from India, indicating that Delhi still wants its investment.