Chinese smartphone giant Xiaomi expands production footprint in India with local contract manufacturer Padget Electronics

Xiaomi’s new deal in India with Padget Electronics involves assembling smartphones and other electronics products
That new alliance shows how major handset brands are boosting their production in the world’s second-biggest smartphone market

Xiaomi

Che Panin Beijing

Published: 10:00pm, 28 Sep 2023

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Chinese smartphone giant Xiaomi Corp has partnered with a large Indian consumer electronics company in a move that will increase production of its handsets and other devices in the South Asian country amid increased regulatory scrutiny by New Delhi.

Dixon Technologies said in a filing to the Bombay Stock Exchange on Wednesday that it has entered into a partnership with Xiaomi through its subsidiary Padget Electronics, which involves assembling smartphones and other electronics products for the Chinese firm at its facility in Noida, a city in the Gautam Buddha Nagar district of the northern state of Uttar Pradesh.

The deal “represents a major milestone in the Indian government’s ‘Make in India’ initiative”, said Dixon vice-chairman Atul B Lall in a statement, which referred to the domestic manufacturing initiative of Indian Prime Minister Narendra Modi.

The manufacturing alliance with Padget shows how Xiaomi, Apple and other major handset brands are boosting their production in India to meet growing demand in the world’s second-biggest smartphone market behind China.

Shoppers inspect smartphones made by Xiaomi at a Mi store in Gurgaon, a city in the northern Indian state of Haryana, on August 20, 2019. Photo: Agence France-Presse

Xiaomi initially set up local production in India in 2015 through electronics contract manufacturer Foxconn Technology Group.

The Beijing-based company, however, played down the significance of that new contract manufacturing deal in India.

“This new announcement is just a continuation of the same partnership,” according to a statement from Xiaomi India. The firm indicated that Padget serves as one of five electronics contract manufacturing service providers that Xiaomi has in India.

Modi’s financial incentives to boost local manufacturing, as the domestic market for smartphones has expanded, has helped India attract more investments from various major electronics brands that want to diversify production outside mainland China.

Padget is one of a few companies that have received grants from a government-backed programme that promotes manufacturing of telecommunications and networking products in India, according to Dixon’s filing.

Xiaomi profit doubles in second quarter amid strong premium smartphone sales

The partnership with Padget comes months after Xiaomi announced plans to expand its network of bricks-and-mortar stores across India. It currently has 18,000 stores in the country.

The store expansion strategy underscores the company’s resolve to check its shrinking market share in the country even as it continues a protracted legal battle with New Delhi over returning US$676 million of the company’s frozen funds.

Indian authorities have accused Xiaomi of making remittances to foreign entities under the guise of royalty payments. Xiaomi has denied any wrongdoing, saying the payments made to US tech firm Qualcomm were legitimate.

Xiaomi had about a 15 per cent share of India’s smartphone market in the second quarter, ranking third behind Samsung Electronics and Vivo, according to data from Counterpoint Research.

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