Xiaomi (OTC:XIACF) Inc.'s supplier, Dixon Technologies India Ltd., is set to inaugurate a new factory on the outskirts of New Delhi, as India pushes Chinese tech firms to use local assembly partners. The factory, which will largely produce Xiaomi smartphones, is a result of India's pressure on Chinese companies to localize everything from manufacturing to distribution of devices.
The factory will be inaugurated by a government official toward the end of September 2023. Dixon plans to invest over 4 billion rupees ($48.2 million) over three years in the facility, which spans more than 300,000 square feet or approximately the size of six football fields. The details were shared by people familiar with the matter who chose to remain anonymous due to the private nature of the information.
This strategic move comes as Beijing-based Xiaomi has been compelled to partner with Dixon for smartphone assembly. As a result, Xiaomi's older suppliers in India — Taiwanese Foxconn Technology Group's Bharat FIH and China's DBG Technology Co. — are expected to lose business.
Earlier this year, Xiaomi made a similar move when it awarded a contract to India's Optiemus Electronics Ltd. to manufacture its Bluetooth neckband earphones, a product it previously imported from China.
India, being the world's second-largest smartphone market, is a fiercely contested region for global phone brands. Manufacturers such as Apple Inc (NASDAQ:AAPL). are competing to boost sales in the world's most populous country. Xiaomi, once an unrivaled leader in India's smartphone market, lost momentum after facing heightened regulatory scrutiny and overexpanding its product portfolio — which by its own admission confused customers. However, Xiaomi is betting on a gradual recovery by offering affordable locally made 5G smartphones.
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