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Xiaomi in active discussions with two new component partners for local production: Manu Jain
TT Correspondent |  |  28 Nov 2018

Chinese handset maker Xiaomi is in active discussions with two more component partners to set up factories to support its growing operations in the country, especially its smartphones business where it has emerged as the market leader.

"We have two other partners who are in active discussions with us for multiple components... nothing is finalised yet," Manu Kumar Jain, vice president at Xiaomi Global and managing director at Xiaomi India, told ET.

Local sourcing of components will help the handset maker to reduce the prices of its products in India, besides reducing the go-to-market time.

Xiaomi has been taking steps to bring its entire component ecosystem partners to India. It had earlier this year brought over 50 of its supply chain partners from China and Taiwan to the country to evaluate opportunities for setting up local factories.

These component suppliers visited Andhra Pradesh and Uttar Pradesh to explore investment opportunities. Xiaomi had then said that these players could potentially invest $2.5 billion (Rs 15,000 crore) together in India over the next few years and could create 50,000 jobs.

One of Xiaomi's major components supplier Holitech Group, which was among these 50 component suppliers, is already setting up a new upcoming 75-acre facility in Tirupati, Andhra Pradesh with an investment $200 million (Rs 1,400 crore) in next three years to locally produce camera module, touch screen panel, TFT (thin film transistor), flexible printed circuit and fingerprint module exclusively for Xiaomi.

According to Indian Cellular and Electronics Association, cumulative investments from mobile component makers, PCB (motherboard) assembly, etc, for this fiscal is likely to be in the range of USD 1.5-2 billion (Rs 10,500-14,000 crore).

Xiaomi already has six manufacturing facilities for smartphones and one unit for power banks spread across Andhra Pradesh, Tamil Nadu and Noida (UP). It recently started its first-ever SMT (Surface-mount technology) plant in collaboration with Foxconn, to begin printed circuit board or PCB assembling in Sriperumbudur, Tamil Nadu.

Jain also said Xiaomi is actively looking at start-ups or strategic investment and partnerships to build a complete ecosystem around its services and products.

"We are investing in a lot of startups. This is a key focus area for us. We continue to invest in a large number of startups. I am personally spending a lot of time on this... at least one day in a week or a fortnight meeting just spent on meeting a large number of startups," he said.

Xiaomi has so far invested in more than 10 startups in the country through its $1 billion corpus announced late last year by CEO Lei Jun. It plans to invest $1 billion in 100 Indian startups over the next 5 years to create an ecosystem of apps around its smartphone brand.

"The aim is to do strategic investments. We work in partnerships and also through investment. We are investing in startups in areas of mobilily... any company in the content space or platforms," Jain said.

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