NEW DELHI: Reliance Industries Ltd (RIL) has asked local suppliers to ramp up production capacity in India so they can make as many as 200 million smartphones over the next two years, according to people familiar with the matter, a potentially enormous boost for the country’s technology ambitions and a warning shot to rivals such as Xiaomi Corp.
India’s most valuable company is in talks with domestic assemblers to make a version of its Jio phone that would run on Google’s Android and cost about Rs 4,000 ($54), said the people, asking not to be identified since the plans are private. The inexpensive phones will be marketed with low-cost wireless plans from Reliance Jio, the parent company’s carrier, they said.
Reliance chairman Mukesh Ambani is aiming to remake the country’s smartphone industry much like he did in wireless services, where his aggressive prices and simple plans quickly made him the dominant force. The billionaire is also aligning himself with the government’s plans to build more domestic manufacturing, a possible boost for local assemblers like Dixon Technologies India, Lava International and Karbonn Mobiles.
“We are of course trying to build our domestic companies. We have a sweet spot in entry level phones,” said Pankaj Mohindroo, chairman of the India Cellular & Electronic Association, during an interview on Bloomberg Television. “The world has realized that India is a great place to do business and a great place to do manufacturing also.”
Representatives for Reliance declined to comment.
Reliance’s target of selling 150 million to 200 million phones over two years would represent a massive boost for local factories. India assembled an estimated 165 million smartphones in the year ended March, and about an equal number of basic feature phones, according to Mohindroo’s association. About a fifth of the smartphones cost less than Rs 7,000, or about $100.
Reliance rival Bharti Airtel is also in talks with assemblers to build its own 4G device, local media has reported. The Business Standard reported earlier that Ambani was considering outsourcing phone-making.
Reliance in July struck a broad alliance with Google, in which the Alphabet Inc. unit would invest $4.5 billion and cooperate on technology initiatives. The partnership is still under regulatory review so Reliance is proceeding with the mobile phone initiative on its own for now.
Ambani has drawn more than $20 billion in investments from US giants like Facebook Inc for Jio Platforms Pvt, whose subsidiary Reliance Jio Infocomm Ltd is placing the order. It’s worked with assemblers on prototypes for at least two years in secret and can bring a phone rapidly to market, though it’s likely to miss the November Diwali shopping season, the people said.



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