Finnish handset maker HMD, known for producing Nokia-branded feature phones, is moving a substantial part of its manufacturing operations from China as part of its broader strategy to make India its global manufacturing hub. The company has also begun discussions with its electronic component suppliers across geographies to encourage them to set up factories in the country to support its export goals.
The company hopes to benefit if the new US administration under President Donald Trump levies stricter tariffs on China, extending the trade war between the two of the largest economies in the world.
"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.”
The top executive said that HMD has shifted a significant part of its manufacturing infrastructure, including critical resources such as the supply chain sourcing team. “They used to operate out of China but are now based out of India to support exports… This is just in sync with our strategy to make India a very viable alternative to China from an export perspective.”
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. “It also depends on how competitive India becomes as a destination. For exports, we need cost, quality and consistency in delivery. As long as India continues to improve on these fronts, a higher percentage of China manufacturing will shift here.”
HMD exports Nokia feature phones and smartphones to West Asia and Africa from India. “With the changing geopolitical scenario and the focus on security linked with supply chain, exports to the US and Europe will be in larger focus now,” he said.
The company has urged its parts suppliers from other countries to set up shop in India. “The component makers realise the potential for domestic consumption in India and export opportunity… A big shift will happen once we have a clear policy from the government. We have given our input on what can help drive the transformation of local sourcing and component ecosystem,” he said.
The Ministry of Electronics and Information Technology (MeitY) is thrashing out a cabinet note for the long-pending electronics component manufacturing scheme, which will cost around Rs 40,000 crore. Moneycontrol reported on November 25 that the note is expected to be floated by mid-December.
HMD's majority of feature and smartphone production is done by Dixon Technologies, an electronics manufacturing services provider. It has also started working with Zet Town India, a subsidiary of Zetwerk, to expand its capacity for Indian-made feature phones.
The Finnish handset major, which stopped using the Nokia brand for its smartphones and relaunched a new brand identity earlier this year, has renewed its focus on the mid-range segment with its latest Fusion smartphone, which comes with attachable accessories called Smart Outfits for gaming and photography.
The executive said that the new brand identity and new smartphones will help the brand garner value and volume market share in the Indian market. “We continue to focus on the Rs 10,000-Rs 15,000 price segment and probably sub-Rs 10,000 next year.”
HMD, which owns the licence to make and sell Nokia mobile phones until the end of 2026, has earmarked three pillars as part of its India strategy for 2025: secure devices, offering detox devices, which means non-smartphones and feature phones, and device financing. “Security is not just limited to government or military but concerns consumers as well. This segment is growing rapidly,” Kunwar said.
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