Xiaomi Supplier Dixon Tech to Open Smartphone Plant as India Pushes for Local Manufacturing

According to a recent report, Dixon Technologies India, a supplier for China’s Xiaomi Inc. will be inaugurating a large new factory located on the outskirts of New Delhi. Dixon Tech will invest more than 400 crores ($48.2 million) in its 300,000-square-foot factory over a three-year period. Its primary focus will be manufacturing Xiaomi smartphones. The official inauguration of the facility is scheduled for the end of this month.

All About Xiaomi and Dixon Tech Factory

Xiaomi has entered into this partnership with Dixon because of India’s insistence on localizing various aspects of the smartphone industry, from manufacturing to distribution, for Chinese companies. Consequently, Xiaomi’s existing suppliers in India, namely Taiwan’s Foxconn Technology Group’s Bharat FIH and China’s DBG Technology Co., are expected to be phased out.

Earlier this year, Xiaomi also collaborated with India-based Optiemus Electronics Ltd. in Uttar Pradesh to manufacture Bluetooth neckband earphones, which were previously imported from China.

In June of this year, Xiaomi joined forces with contract manufacturer Dixon Technologies (India) Ltd to produce and export phones for the Chinese company. Mos IT Rajeev Chandrasekhar informed the Indian government about Dixon’s plan to assemble and export Xiaomi smartphones.

India is the world’s second-largest smartphone market, and it has emerged as a target market for major phone companies such as Apple Inc. Xiaomi, in particular, is aiming for a gradual recovery by offering affordable 5G smartphones manufactured locally. Xiaomi used to dominate India’s smartphone market, but it has struggled as a result of governmental inspection and tough competition.

Xiaomi India President Muralikrishnan B. announced in March that the company plans to grow its retail footprint beyond its present network of 20,000 retail partners, as well as increase the local purchase of mobile phone components to decrease costs. In a recent interview, he also mentioned Xiaomi’s intention to import parts from India including displays and haptic feedback components.