Indian smartphone maker Lava recently said that it will shift its production base from China to India. The company will reportedly also shift its design center, which employees 600 people, to the country.
According to a Business Standard report, the recent move is because of the government’s new Production Linked Incentives (PLI) for manufacturers in the country. As per industry experts, this new scheme gives manufacturers a 6% cost advantage in India, something they didn’t have earlier.
According to the company, the “cost disadvantage” Lava had as compared to China is now eliminated by the PLI scheme.
Talking about the development, Hari Om Rai, Chairman and Managing Director of Lava said, “We have been eagerly looking forward to an opportunity to shift our entire mobile R&D, design and manufacturing from China to India. With the production linked incentives, our manufacturing disabilities for the world market would largely be met hence we plan to make this shift.”
The recent move is also expected to create many jobs in the current unemployment crisis. The company’s design center alone employs over 600 people in China. Lava directly employs about 1,700 employees worldwide. Also, many of the factory workers at Lava are on contractual basis. Once the company steps its foot in the Indian ecosystem, it will surely lead to a creation of several jobs.
Currently, Lava exports over 33% of its mobile phones to markets such as Southeast Asia, West Asia, Africa, and Mexico.
Since the proliferation of Chinese smartphones in the Indian market, companies like Lava, Micromax, Karbonn, among others, had found themselves at a disadvantage. However, Lava is among the few Indian players who had been able to move into other countries and sell phones there. The company also moved most of its business towards the manufacturing and design side of things.
The company had also benefited from the recent US-China trade war, gaining a sudden influx of business last year. Reports suggest that US telcos AT&T, T-Mobile and Sprint had handed orders worth approximately ₹2,500 crore to companies like Lava and Micromax, thanks to rising tensions between the two countries.
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