HMD Bolsters Indian Manufacturing Operations In Shift Away From China

HMD Global is reportedly shifting a significant portion of its manufacturing operations from China as part of the Nokia phone manufacturer’s broader strategy to establish India as its global manufacturing hub. 

According to Moneycontrol, the company is also in talks with electronic component suppliers worldwide to encourage them to set up factories in the country to support its export goals.

“A bulk of what we used to do out of China is being moved to India, whether it is our supply chain, sourcing or logistics hub. Slowly and gradually, we have been strengthening our India leg, helping us build onto our robust export strategy for India,” Ravi Kunwar, CEO and VP for India and Asia Pacific at HMD, told Moneycontrol. 

“Whatever we have been exporting out of China, that percentage is going down and increasing in favour of exporting out of India,” he added.

The top executive told Moneycontrol that HMD has relocated a significant portion of its manufacturing infrastructure, including key resources like the supply chain sourcing team, from China to India. This move aligns with the company’s strategy to position India as a strong alternative to China for exports.

He, however, said that shifting HMD’s entire manufacturing operations from China will take some time, suggesting that doing so would be a complex process. 

In May, it was reported that HMD Global was looking to make India a manufacturing hub for its phone exports.

HMD Global, which sells its smartphones in Kenya, Australia, China, Europe, and the US, counts India as its largest market. In 2023, the company reportedly secured nearly 15% of the domestic feature phone market, but its share in India’s overall smartphone market was only 0.4%.

HMD Global makes nearly 100% of its phones sold in the domestic market in India through partnerships with local players like Dixon Technologies and Lava, as per the report.

The company tapped the two partners because they are beneficiaries for incentives under the country’s production-linked incentive (PIL) scheme for mobile phones.

HMD Global conducts most of its feature and smartphone manufacturing through Dixon Technologies. To further boost its production of Indian-made feature phones, the company has partnered with Zet Town India, a subsidiary of Zetwerk.

Earlier this year, the Finnish handset maker unveiled a new brand identity, moving away from the Nokia name for its smartphones. It has also shifted its focus to the mid-range segment with the launch of its Fusion smartphone, featuring attachable accessories called Smart Outfits designed for gaming and photography.

The refreshed brand identity and new product lineup aim to strengthen HMD’s value and volume market share in India, the spokesperson told Moneycontrol.

The development comes at a time when India is emerging as a smartphone manufacturing hub, with companies like Apple, Samsung, Oppo and Xiaomi expanding their manufacturing operations in the country.

For instance, Apple manufactured iPhones worth $14 Bn in the country in the fiscal year ended March 2024.

Apple aims to produce 32% of its global iPhones in India by FY27. 

Earlier this month, Apple also established a new subsidiary in the country, Apple Operations India, to focus on research, design, testing, and supporting third-party manufacturers.