India’s Telecom market is one of the biggest and fastest growing in the world.With almost 20 million handsets sold in a month,it is one of the most lucrative mobile phone markets globally.Nokia has been the undisputed market leader with around 53% marketshare.However Nokia’s dominance has been eroded by the advent of local Indian players like Lava,Lemon,Micromax and others.India’s telecom policy has been changed to favor local manufacturing and players,leading to some success for these mom and pop companies.But their success can be attributed to Chinese low cost manufacturing.These companies have no technology or manufacturing,they are only glorified distributors who buy from Chinese factories and distribute the phones in India.

India’s Illegal Grey Market has always been a source of Huge Profits

India has a massive grey market for electronics.Grey Market is a term used to describe a market where goods are imported illegally without paying duties and taxes.With electronics always attracting a duty of 25-30%,this grey market has been an attractive source of profits for unethical operators.For customers the attraction in buying gadgets from these markets is that you get a 20-25% discount from regular legal outlets.These market run with complete impunity with Ghaffar Market in Delhi and Fancy Market in Kolkata famous for stocking these illegal goods.They run under the patronage of political and business lobbies and face no pressure in running their illegal operations.

An estimated 8 million handsets are imported in India every month most of them through the grey market route.With small size and high prices,handsets are the ideal grey market products.Paying no taxes and duties gives them a massive edge over legal mobile phones.The size and quantum has become so big that India’s telecom minister has written to the ministries to stop this trade.This implies that the problem is quite huge,since India’s telecom minister is not exactly the paragon of virtue.

Grey mobile mkt under lens, Raja seeks action – FE

elecom minister A Raja has decided to crack the whip on the vast grey market of imported mobile handsets. In a letter addressed to the secretaries of the department of telecommunications and information technology on July 9, the minister has expressed concern over the huge revenue loss to the government and the threat to national security from these products.While asking the secretaries to take steps to check import of mobile handsets, Raja has sought to know the status of implementation of measures being taken by the ministry to promote indigenous manufacturing of handsets.

“It has come to my attention that many Indian distributors have developed brands, which are merely phones sourced from abroad and re-branded here. These brands have not created any manufacturing in India, but have been given a free access to the Indian market because of our liberal policies. The policy measures, which we take should promote the growth of manufacturing of both mobile phones and mobile phone parts and components and not merely promote re-branding and re-distribution,” the minister has stated in the letter.“Existence of unbranded phones, which are largely unregulated is a drag on the otherwise shining success story of domestic manufacturing and robust export,” he added.