HMD looks to strengthen exports from India amid rising US-China trade tensions

Human Mobile Devices (HMD), makers of Nokia-branded mobile phones, is gearing up capacities and local supplier ecosystem in anticipation of higher levels of exports from India to global markets amid higher tariffs expected to be levied on Chinese products by the incoming US government under President-elect Donald Trump.

“Developments in the US do bring an opportunity to India as a plus-one manufacturing hub. Our organization is geared up, and obviously yes, we are (scaling up). A lot of our sourcing and supply chain, is now being based out of India,” Ravi Kunwar, CEO and VP of HMD told Mint in an interaction.

The company is aiming to raise exports from India to more than 4 million. HMD is currently exporting Nokia brand of feature phones and smartphones to West Asia and Africa, from India. Exports to the US and Europe will be in larger focus now.

He added that the local contract manufacturing ecosystem had grown immensely enabling many companies to depend on local players, but noted the need for local component manufacturing ecosystem to be developed since supplies of components were still reliant on China.

“That is where we are working very closely with the government in terms of what could be the right policies for India to stand up on its own,” Kunwar added. The government is presently creating policies for incentivizing local manufacturing of components to bolster the government’s Make in India plan.

Mint reported in July this year that HMD intended to increase local production by 30-40% by 2025 from 15-16 million units a year currently, while the volume share of smartphones within that mix will more than double. At present, production comprises 70% feature phones and 30% smartphones, and takes place through partnership with electronics manufacturing services provider Dixon Technologies. HMD has tied up with Zet Town India, a subsidiary of Zetwerk, for capacity expansion.

Read more: Demand from European markets fuels recovery in India’s textile exports amid Bangladesh crisis

The Finnish smartphone which intends to make India a base for its global operational platform for production and exports is equally betting on new form factors including the Barbie Flip phone from Mattel and the Fusion series with multipurpose back covers, to garner value and volume market share in the Indian market.

The ₹15,999 priced Fusion device comes with a gaming console as an attachable back cover which can also be plugged into a TV and a ring light back cover for taking selfies. HMD believes that the device along with its previous Crest series and Skyline will help it take more share of the lucrative ₹10,000-25,000 market.

Kunwar added that the company’s strategy for 2025 will be concentrated on three pillars, first being offering secure devices alluding to the large presence of Chinese brands. “We believe we have an edge since we’re Finnish and we do everything out of Finland, and there is a lot of geopolitical tension which is leading companies to drive into more secure devices,” Kunwar said.

The other two include offering detox devices which means non-smartphones and feature phones; and device financing which enables consumers to buy a device with easy payment plans with minimal or no interest, and soft locking which enables the company to discontinue service if installments are not paid.

“This whole business model is really doing well for us in Africa, especially in Kenya. We’re now bringing this functionality to a lot of emerging markets where it can bridge the gap between people who want to have a smartphone but can't afford it,” he added.

HMD, which owns the licence to make and sell Nokia mobile phones until the end of 2026, launched the first set of smartphones under its own brand, Crest in India in July. It currently has four models in the global markets including Pulse and Skyline series.

About 160 million smartphones were sold in India in 2023, according to Counterpoint Research, of which the brands combined intend to take a sizeable share. At present, they have about 1-2% market share in the country.