Indian Government Bans Low-Quality Mobile Phone Imports

By Indrajit Ghosh – Director, India and South Asia, DisplaySearch

The Indian government agency DGFT (Directorate General of Foreign Trade) has clamped down on low-quality mobile phones imported into India, in particular mobiles without IMEI (International Mobile Equipment Identity) numbers.

This ruling is likely to have a severe impact on the estimated 800K Chinese white brand handsets imported per month (believed to be 10-20% of Chinese white brand handsets).

Fledging domestic brands like Spice, Onida and Usha were finding it very difficult to combat the influx of non-regulated cheap imports, and major players like Nokia, Samsung, and Sony joined the chorus for this ban. Some of these phones are copies of the famous models of leading brands with Nokia’s N91 being the favorite target.

It is also significant that the ban was supported by counter-intelligence agencies, as it was found that many remote-controlled terror acts were actually triggered through these cheap phones without IMEI, making it virtually impossible for the security agencies to track the source.

However this ban may fuel the conflict between China and India in the next round of WTO discussions, where China will surely raise the issue as a case of unfair trade rules.

An interesting point is that China had successfully lobbied to cancel a similar ban against low-quality Chinese toys, noting that only China was targeted. But this time may be different, as mobile phones are not toys, and it seems that this ban could not be more encompassing, since it does not mention any countries and is aimed at notorious traders with scant respect for quality, health hazards, tax evasion and national security.

This ban is playing out in the context of a changing Indian mobile phone market; in the last quarter, Nokia India overtook China as the largest production hub for the Indian market, creating jobs and commerce in India. Also, Russian cellular operator MTS began offering lifetime free talk time within the network for Rs 480 (approximately $10), taking competition to dizzying heights.

In India, the mobile has become the new toy for a growing segment of the population. Children graduate directly from playing with toys to handling cheap mobiles with high-end features. It rightly proves that boys never grow up: only the toys change.