India for several months held permits to import Wi-Fi modules from China, which spurred companies such as US computer makers Dell (DELL.N) and HP (HPQ.N) and China’s Xiaomi (1810.HK), Oppo, Vivo and Lenovo (0992.HK) to delay product launches in a key growing market, two industry sources said.
Sources said imports from China of off-the-shelf electronic devices such as Bluetooth speakers, wireless headphones, smartphones, smartwatches and laptops containing Wi-Fi modules are being delayed.
According to sources familiar with the lobbying efforts of firms seeking approval, the Communications Department’s Wireless Planning and Coordination (WPC) Division has been denying approval since at least November.
Since then, the WPC has received more than 80 such applications from firms in the US, China and Korea, one source said. Sources added that even applications from some Indian firms that bring finished products from China are awaiting WPC approval.
Dell, HP, Xiaomi, Oppo, Vivo, and Lenovo did not respond to requests for comment.
The Ministry of Telecom and Mass Communications also did not respond to the request for comment. Both sources said the government has yet to respond to statements by industry lobbying groups and individual companies.
India’s tough stance on Chinese imports stems from Prime Minister Narendra Modi’s call for greater economic independence.
His nationalist policies have helped accelerate the growth of smartphone assembly in the South Asian country, and sources believe the government intends to convince the company to locate more of its electronics manufacturing facilities in India.
“The government’s idea is to push companies to manufacture these products in India,” said one source.
“But tech companies are in a tough spot – setting up in India would mean costly investment and a long wait for profits; on the other hand, a government-imposed import barrier means a potential loss of revenue.”
India previously allowed companies to self-declare wireless equipment, making it easier to import, but new rules passed in March 2019 oblige companies to seek government approval.
While India’s market and export potential has propelled it into the second largest mobile device manufacturer in the world, technical analysts and industry insiders say it does not yet have the size or scale for companies to invest heavily in IT products and intelligent wearable devices.
CAUTION CHINA TECH
The long delay in WPC approvals also underscores India’s strategy to reduce China’s influence in its tech economy, especially after the border clash with Beijing last year, although tensions have eased since then.
This week, Modi’s government removed Chinese gearmaker Huawei from the 5G trials, although European and Korean rivals were admitted.
As Reuters previously reported, once India rolls out 5G, New Delhi is likely to ban mobile operators from using Huawei’s telecom equipment.
US companies Apple, Cisco (CSCO.O) and Dell faced tensions between India and China last year as Indian ports stifled imports from China.
In another example, reported by Reuters late last year, India’s tight controls over access to quality electronic goods from China slowed imports of the Apple (AAPL.O) iPhone model.
Now that firms have obtained safety approvals from the Indian quality control agency, gaining WPC approval has become a major obstacle to importing electronic devices from China.
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