Is the Reliance JioPhone Really Being Made in India?

Reliance JioPhone and JioPhone 2 will help Reliance Jio come close to its target of 100 million feature phone users.

Recently a media report quoting the Chairman of The Mobile Association claimed that Reliance is mostly importing JioPhones into the Indian market. In addition to this, the body also alleged that JioPhones were not only getting imported, but reaching our shores without paying any customs duty.

Reliance Jio quickly refuted those allegations and was upfront in saying that all JioPhones, including the upcoming JioPhone 2 is and will be made in India. This ensures that Jio exempts itself from paying any duties, something that most mobile brands still can’t avoid.

What's the real story behind Reliance JioPhone's 'Make-in-India' claims? We spoke with industry experts who track the movements of mobile phones into the country and here’s what we found.

The initial lot of phones were imported, but now most are made locally.

According to CyberMedia Research (CMR), a reputed analyst entity, JioPhones were largely being imported by Reliance Jio till the first quarter of 2018. The figures shared via the CMR report clearly shows that in Q2 2018, more JioPhones were locally sourced than imported.

The first batch of JioPhones were primarily imported. But gradually we have seen the company localising the components of the device, which is now more than what was being imported earlier.

Faisal Kawoosa, Head - New Initiatives, CyberMedia Research

However, Faisal is quick to point out that JioPhone is not an exception and most devices from India-based brands are also first imported and then gradually assembled locally.

Interestingly, when the phone was launched in late 2017, most of the devices which were sold to consumers, were imported from different vendors.

Names of vendors like Megafone Guiyang Limited (as seen above), Ck Telecom (Heyuan) Limited and Shenzhen Crave Communication Co. Ltd feature in the list of the Bureau of Indian Standards (BIS) that was shared with us by CMR.

So, while the first batch of JioPhones were indeed imported, the company has been steadily sourcing locally to build its inventory for Q2 2018 onwards.

This is likely to include the units of the JioPhone 2 as well, which was announced earlier this month with a QWERTY keypad and priced of Rs 2,999. The phone will be available 15 August onwards, according to the Reliance-owned telecom operator.

How JioPhone Affects Indian Phone Brands

Now that it's clear the JioPhone is being mostly made in India, it’s worth revisiting how this 4G feature phone has impacted the fortunes of other Indian mobile brands. And there’s no sugarcoating the fact JioPhone has affected their businesses.

Numbers speak for themselves here and a recent Counterpoint Research report clearly shows the market impact of JioPhone. Reliance Jio leads the feature phone segment.

Micromax, which was once a market leader in this space, has been pushed to the others category, along with Karbonn. Samsung has somehow retained its position but with a big drop in its market share. Same goes for Itel and even Lava.

With Reliance Jio targeting over 100 million JioPhone users in the shortest possible time, it’s sure going to be a challenge for most brands in this segment. They can either innovate and survive or disappear like most brands in the market without putting up a fight.