Xiaomi's future in India is at stake

Chinese smartphone maker Xiaomi’s future in India is in the hands of a special panel, which has been set up by the government to decide whether Xiaomi’s proposal meets the "cutting edge technology" condition. Only if the panel says yes that Xiaomi will be allowed to set up stores in India without the mandatory domestic sourcing, as per the new FDI rules.

The new rules say that companies bringing cutting edge and state-of-the-art technology to India will be allowed to open single-brand outlets without 30% compulsory sourcing of materials locally subject to government approval.

To make good use of this opportunity, Xiaomi had earlier this month applied for single-brand retail under the state-of-the-art category, seeking permission to forego the 30% sourcing norm for a range of its products including Wi-Fi amplifiers, Bluetooth speakers and power banks.

The panel comprises of three members, secretary of DIPP, one member of the NITI Aayog, and a representative of the administrative ministries including telecom and information technology. It has been formed by government to define cutting edge technology. The panel will now consider all such proposals submitted under this category on a case to case basis.

As per a senior government official, "Any technology which has never been made before in India and cannot be replicated is worthy of being considered under the cutting edge definition."

Besides Xiaomi, Apple had also applied for a similar licence, and the application is being considered for approval by the government.

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