Xiaomi has said it wants its global smartphone component makers to set up bases in India, in what is likely to bring as much as $2.5 billion of investment to the South Asian nation and create up to 50,000 jobs.
Xiaomi's push could boost Indian Prime Minister Narendra Modi's flagship "Make in India" drive that is aimed at adding tens of millions of new jobs and turning Asia's No.3 economy into a global manufacturing hub.
Xiaomi, which may hold a large IPO this year, has six smartphone manufacturing plants in India. It hosted more than 50 of its global suppliers in New Delhi at an investment summit on Monday that was also attended by key Indian officials.
If the suppliers at the summit were to set up shops in India, a top market for Xiaomi, it would bring in $2.5 billion in investment and create as many as 50,000 jobs, the company said.
The Chinese company has unseated South Korean rival Samsung Electronics to take top position in India's smartphone market - the world's second biggest.
Xiaomi, which began assembling smartphones through Foxconn in southern India in 2015, will now assemble parts like memory and processors on printed circuit boards locally, said Manu Jain, managing director of Xiaomi's India operations.
"Today we are deepening this commitment with three more smartphone factories and our first surface-mount technology [SMT] plant dedicated toward local manufacturing," Jain said in a statement.
SMT is a method by which components are embedded onto printed circuit boards (PCBs). Once populated with components, PCBs that house memory, chips and other components typically account for about half the cost of a smartphone.
This announcement comes a week after India imposed a 10 percent import duty on some key smartphone components, including populated PCBs. The South Asian nation is Xiaomi's second-largest market after China.
Xiaomi's SMT plant will be run by Foxconn, the world's largest contract electronics manufacturer and a key Apple supplier.
However, Xiaomi's push to get suppliers to India could spark job loss concerns in neighboring China, which is among the top electronics manufacturers in the world.
"India's cheap labor offers more competitiveness to manufacturers, demand is vast and in India opportunity is also huge because the market is much less saturated compared with China," said Jaipal Singh, a senior market analyst for client devices at technology research company International Data Corp.
On Monday, Xiaomi was reported to be in talks to take a stake in Indian financial technology start-up Zest-Money in a financing round totaling about $20 million, Indian news outlet Economic Times reported, citing two sources familiar with the matter.
Xiaomi declined to comment on the matter when reached by the Global Times Monday.
