'Make in India' push: Xiaomi's supplier Dixon all set to open smartphone plant on Delhi outskirts

China-based Xiaomi Inc's supplier Dixon Technologies India will be opening a massive new factory on the outskirts of New Delhi, a report said on Friday.

Dixon will invest more than Rs 400 crore ($48.2 million) over three years in the factory, which is spread over more than 300,000 square feet and will largely produce Xiaomi smartphones, the Bloomberg News report said. The plant is set to be inaugurated by a government official toward the end of this month.

Xiaomi has been forced to partner with Dixon for smartphone assembly because India is pressing Chinese companies to localise everything from manufacturing to distribution of devices. The new initiative would mean Xiaomi’s older suppliers in India — Taiwanese Foxconn Technology Group’s Bharat FIH and China’s DBG Technology Co. — will be pushed out.
 
Earlier this year, Xiaomi signed a deal with India-based Optiemus Electronics Ltd. in Uttar Pradesh to make its Bluetooth neckband earphones. Similar products were previously imported from China.

In June this year, Xiaomi partnered with contract manufacturer Dixon Technologies (India) Ltd to make and export phones for the Chinese firm. Mos IT Rajeev Chandrasekhar had said that Xiaomi has informed Prime Minister Narendra Modi’s government about the plan for Dixon to assemble and export Xiaomi smartphones.

India is the world’s second-biggest smartphone market and is the new hotbed for the world’s largest phone brands, such as Apple Inc. On its part, Xiaomi is looking at a gradual recovery, as it looks to offer affordable locally made 5G smartphones. Xiaomi was once an unrivaled leader in India’s smartphone market. It lost steam after facing heightened regulatory scrutiny and stiff competition.

Earlier in March, Xiaomi India President Muralikrishnan B. told Reuters that the company will open more stores beyond its current network of 20,000 retail partners and boost local procurement of mobile phone parts, in an effort to reduce costs. In an interview recently, he stated that Xiaomi wants to increase sourcing from India, including key components such as display and haptic feedback modules.

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