NEW DELHI: India is seeking to restrict Chinese companies from its sub-$150 phone market in a bid to revive the prospects of domestic players, Bloomberg News reported on Monday, citing unidentified sources.

The move would be a blow to Chinese companies such as Xiaomi, according to the report. The plans coincide with rising concerns in India about Chinese brands undercutting local smartphone makers, it added.

It is unclear if the Indian government will announce policies or use informal channels to execute the block on Chinese smartphone makers, Bloomberg said, citing people familiar with the matter.

Chinese firms account for a major chunk of entry-level smartphones that are popular among users shifting away from traditional devices in India, which is the second largest mobile market in the world.

Smartphone makers Xiaomi and Vivo accused of illegal remittances and money laundering

Indian firms such as Lava and MicroMax rapidly gained popularity after their launch over a decade ago, but have since lost market share to stiff competition from Chinese players.

Many Chinese companies have struggled to do business in India due to political tensions following a border clash in 2020. India cited security concerns in banning more than 300 Chinese apps, and has also tightened rules for Chinese companies investing in India.

Xiaomi and rival Vivo are being investigated by India’s financial crime fighting agency for alleged illegal remittances and money laundering. Both deny any wrongdoing.

The companies and the Indian government did not immediately respond to requests for comment on the report.

Published in Dawn, August 9th, 2022