India Bans Sale Of Devices With No IMEI

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Chinese manufacturers have been building smartphones and tablets running the Android operating system for a number of years now. Because the majority of Google's Services are unavailable in China, in some cases the manufacturers have redesigned Android to work without Google's core applications and have provided their own services: Xiaomi is one example of this, where the company considers itself to be an Internet business that also makes smartphones. In other cases, the manufacturer has forked Android to make it their own operating system, which does not include the Google Play Store as standard. Other manufacturers include the stock Google applications in their Android software builds. As far as the devices go, a small number of years ago, Chinese smartphones were considered to be poor quality, sourced using locally manufactured, poor quality components – although they were cheap. Today, many Chinese devices are well made from good quality, locally manufactured components and perform as well as the big name devices available for sale around the world – but are often considerably cheaper to buy.

Sales growth into Chinese smartphone market has been slowing down as more and more people already have a device. To support their businesses, many Chinese manufacturers are now looking to build smartphones for other countries: India is seen as one of the next significant markets. Here, the country is enjoying rapidly growing Internet use, carriers are rapidly expanding their networks and device prices are cheap enough to be accessible. The Indian Government recognised this and has put into place a number of policies designed to support the Indian economy rather than other economies and the chief one here is "Make In India." In simple terms, the "Make In India" policy encourages companies to build factories in India, employ Indian workers and build the device for at least the Indian market. And now the Indian Government has made another announcement whereby it is banning the sale of all mobile 'phones that do not include an "IMEI number and security features."

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Unfortunately, the impact of this announcement is unknown as the Indian Government previously banned the import of devices from Chinese manufacturers that lacked a valid IMEI back in 2010. The Indian Air Force has banned Xiaomi devices after it was discovered these communicated with servers based in China. It could prevent manufacturers from building devices without IMEIs under the "Make In India" scheme to be sold to local customers. The latest available data shows that the total bilateral trade between Chine and India is over $65 billion, but the Indian trade deficit is almost $49 billion. The "Make In India" policy has increased import taxes for foreign goods, such as Chinese smartphones, and this is encouraging foreign companies to invest into India – but too many policy changes could disrupt things.