August 11, 2022
Good morning. In today’s either/view, we discuss whether the plan to ban Chinese smartphones under ₹12,000 is a good idea or not. We also look at the marketing of Gangajal in Uttarakhand, among other news.
📰 FEATURE STORY
Anticipated Ban On Chinese Phones – A Step Forward?
After banning multiple Chinese applications in 2020, India is now cracking down on Chinese smartphone companies. Over the past few months, investigations by the Enforcement Directorate (ED) have pushed the government to consider banning Chinese smartphones priced below ₹12,000.
While India is on track to being the largest smartphone market in the world, most companies that dominate this market in the country are Chinese. In light of this, is it the best decision for India to ban Chinese-made smartphones?
Context
The presence of Chinese smartphone brands in India is very prominent. The popularity of brands such as Xiaomi, Vivo, Oppo and Realme is far from minuscule as every other Indian has either heard of them or use a handset manufactured by them. Owing to the good quality and reasonable prices, the dominance of these brands in the Indian market is undeniable.
However, the Indian government has been investigating many of these companies, revealing cases of money laundering by their Indian subsidiaries in order to pay fewer taxes and duties. Against this backdrop, there is already some heat between the Indian government and their neighbour. The action taken against the Chinese entities by the Union government could be a result of the military stand-off between the two countries present along the Line of Actual Control (LAC).
With the ED cracking down on the Chinese mobile company Vivo, the grip of the government over these companies is tightening. In response to this, China issued a statement hoping that investigations into the ongoing money laundering case against Vivo are conducted in a “truly fair” and “non-discriminatory” way. Additionally, the India head of Xiaomi has accused Indian authorities of repeated harassment and even physical violence during questioning.
VIEW: Banning Chinese smartphones is not the answer
Attaining the status of the second-largest market for smartphones could not have been possible for India without the proliferation of devices in the country with the help of affordable Chinese models. According to a study conducted by Counterpoint, 60% of smartphones sold in India come from the Chinese brands Xiaomi, Realme, Oppo and Vivo.
The enthusiastic adoption of smartphones in India has led to the growth of various sectors such as e-commerce and fintech. Due to government policies, Chinese phone manufacturers were forced to localise their production. This means that India is now the biggest mobile manufacturer, second only to China. As a result of this, there are a plethora of employment opportunities in India. Xiaomi alone has over 50,000 employees across multiple factories, offices, stores and service centres.
The vice president of data and analytics at IDC India stated that the dependency of consumers and trade on Chinese brands is too high. Banning these brands in India will create a huge vacuum in terms of jobs, trades and many other sectors.
Additionally, the frequent raids on Chinese companies by the Indian government will negatively affect the business environment in the country. This is not beneficial as India is actively looking for investments from electronics manufacturers in order to reduce dependency on electronics imports.
COUNTERVIEW: Chinese dominance not good
The journey of many Indian smartphone companies such as Micromax, Intex and Karbonn has been downhill since the Chinese brands entered the market. A study conducted by Techarc revealed that the market share of Indian brands fell from 67% in 2015 to a meagre 1% in 2021. In the same time period, the Chinese share in the market skyrocketed from 32% to 99%.
On their ladder to success in the Indian market, the affordable Chinese models have nudged Indian rivals out of the business. In order to combat this, the Indian government launched incentives to increase local hardware production. In light of the looming ban on Chinese smartphones, there is a growing consensus that the lower end of the market should be reserved for domestic companies.
While the contribution of Chinese brands to the Indian components ecosystem cannot be denied, Prachir Vardhan Singh from Counterpoint Research states that Indian companies will benefit from the ban. Since the JioPhone 5G is in the works and will be launched soon, it has a higher chance of doing well if the major Chinese players such as Realme and Xiaomi are banned.
Reportedly priced between ₹9,000 and ₹12,000, the Jio phone is in a prime position to use the leverage that this ban will give it. Similarly, Indian brands such as Micromax, Lava, Padget Electronics and UTL Neolyncs, who have also participated in the incentives scheme, are at an advantage and need to act fast to benefit from the ban. While it is no secret that this is a gradual process, the ban serves as an opportunity for domestic brands to take the lead.
What’s your opinion on this?
(Only subscribers can participate in polls)
a) The anticipated ban on Chinese smartphones under ₹12,000 will benefit India.
b) The anticipated ban on Chinese smartphones under ₹12,000 will not benefit India.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
India’s New Tryst With Destiny Has No Place For Jawaharlal Nehru
For the Left:
Ladakh And Jammu Kashmir: Pathways Of Transformation
🇮🇳 STATE OF THE STATES
Marketing Gangajal (Uttarakhand) – The state government will begin marketing Gangajal under the Nirvan Amrit Gangajal scheme. A plan has been prepared by the Uttarakhand Provincial Cooperative Union (PCU) to market the holy water to 12 million Hindus worldwide. They’ll be packed in ceramic pots called Kalash that are being tested at Khurja’s Central Glass and Ceramic Research Institute. The project is being set up with an initial investment of ₹5 crores.
Why it matters: A majority of Hindus living abroad always store sacred water in their homes. Each package will cost ₹251 for 300 ml. The PSU is looking to partner with e-commerce platforms like Amazon, Flipkart, and also with the Indian Postal Department. The proceeds from the sale will cover the cost of manufacturing ceramic pots, courier charges, and honorariums to Self Help Groups engaged in water collection.
Hospital for rescuers (Kerala) – The survivors and families of those who died in the Air India Express crash at Karipur international airport two years ago have raised ₹50 lakh for the construction of a hospital for locals. A Public Health Centre (PHC) will be built near the site. They have pooled money from the compensation they received. The crash killed 18 people, including the pilot and co-pilot.
Why it matters: Many of the local residents were the first to the crash site and began rescue operations. The nearest hospital was 8 km away from the crash site. While there’s a PHC about 300 metres from the site, it lacks basic facilities. For the survivors and families, it’s a token of gratitude to the first responders.
Request for more IAS officers (West Bengal) – Chief Minister Mamata Banerjee has raised the issue of the state having a shortage of IAS officers with Prime Minister Narendra Modi. In April, Bengal Chief Secretary H.K. Dwivedi wrote to the Centre requesting more IAS and IPS officers. Despite previous appeals, the Centre hasn’t responded. In January, she protested the Modi government’s proposed amendment in service rules to ensure the availability of IAS officers for central deputation.
Why it matters: Banerjee has signalled her intent to carve out seven more districts in the state. Hence, the state will need more administrators even though there has been a shortage since 2017. The state has a sanctioned strength of 378 IAS officers but has a shortage of 79. The state has allocated 12-15 IAS officers per year since 2016, the second-highest among all states after Uttar Pradesh.
Canal Project (Rajasthan) – BJP MP Kirodi Lal Meena, in a rally with his supporters, demanded the state government remove “technical flaws” in the Eastern Rajasthan Canal Project. He told his supporters that some dams in the district have been left out of the project. State BJP president Arun Chaturvedi, who was also present at the rally, said the state should send a new proposal to the Centre after the technical issues are taken care of. Earlier, the Centre decided to put the project on hold due to other states not giving their consent.
Why it matters: Chief Minister Ashok Gehlot said the consent of the Madhya Pradesh government wasn’t necessary, citing a 2005 decision of the interstate body. The state government has been demanding a national project status for the canal project that will benefit 13 districts facing water scarcity. The state said it prepared a detailed project report per decisions by the interstate board and in compliance with the 2010 guidelines of the Central Water Commission.
Drone delivery of medicines (Arunachal Pradesh) – Beginning August 15, drones will be used to deliver medicines to far-flung areas in the state. The state government has partnered with the World Economic Forum (WEF) to launch the “Medicine from the Sky” initiative. This partnership will involve studying the capabilities of drones and how health systems in remote areas respond to this technology.
Why it matters: In February, the state and the WEF signed an MoU to explore the possibility of using drones for medical logistics. For example, the East Kameng district has hilly terrain making it difficult to access, particularly during the monsoon. Once it’s implemented, it’ll be the region’s first automated healthcare drone network.
🔢 KEY NUMBER
₹2.23 crores – The value of Prime Minister Narendra Modi’s assets after a ₹26.13 lakh increase during 2021-22. He no longer owns any immovable property after donating his share of a residential plot in Gujarat.