A phone priced at Rs 10,000 with imported components costing Rs 8,000 can’t be considered a product made in India, they said at a meeting last week with the Department for Promotion of Industry and Internal Trade headed by commerce minister Piyush Goyal<\/a>.
“Our request to the government is to make sure that every consumer, while shopping online, is told what percentage of this product is made in China,” Praveen Khandelwal, general secretary of the Confederation of All India Traders (CAIT), told ET. “It will be interesting to see all these Chinese brands that claim they are Indian in spirit being forced to say upfront on e-commerce websites that only a small percentage of their business is contributing to Make in India.”
Khandelwal was taking a dig at Xiaomi<\/a> India MD Manu Kumar Jain, who told ET last week that the smartphone<\/a> market leader was more Indian in spirit than any Indian smartphone company, having made large investments in the past four years under the Make in India scheme.
According to analysts, the maximum value addition in India is 15-16%, by two smartphone companies – Xiaomi from China and Samsung from South Korea. The rest of the components are sourced from China, South Korea and Taiwan.
“PCBs (printed circuit boards), chipsets, battery packs and displays comprise 65% of the cost of any smartphone, which are not made in India anywhere,” said Neil Shah, research director at Counterpoint Technology Market Research.
Besides, 10% of all smartphones sold in India are imported from China as completely billed units (CBU). However, Xiaomi says the local value addition in some of their devices is as much as 65%.
The traders’ demand comes as India moves to curb Chinese imports amid heightened border tension between the two Asian giants. Online retailers have asked for 4-5 months to comply with a requirement to display the ‘country of origin’ label of products offered on their platforms.
Traders want the local value addition element to be made mandatory as well. The government is likely to hold further meetings on this matter.
The official public procurement vehicle, the Government E-Marketplace portal, has already adopted the new rule, mentioning both the origin country and local content percentage of every product.
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