Google seeks suppliers to move some Pixel production to India

Alphabet Inc.'s Google is scouting for suppliers in India to assemble its Pixel smartphones as it borrows from Apple Inc.'s playbook to diversify beyond China. Google has initiated early conversations with companies including homegrown Lava International Ltd. and Dixon Technologies India Ltd. as well as Foxconn Technology Group's Indian unit Bharat FIH, people familiar with the matter said, asking not to be named as the matter is private.

Google would be the latest global technology player to move production to India. The potential partners it's talking to have won Prime Minister Narendra Modi's so-called production-linked financial incentives, which have boosted local manufacturing. Apple has used the program to widen its supplier base in India and tripled iPhone output to more than $7 billion in the fiscal year through March 2023.

Modi has been pitching India as an alternative manufacturing hub, as more companies are becoming wary of the risks of depending on China after its harsh Covid lockdowns and a trade war between Washington and Beijing. Modi is scheduled to visit the US this week where his delegation is expected to hold talks on topics including a removal of tech trade barriers between the two countries.

Last month, India's Technology Minister Ashwini Vaishnaw met with Google Chief Executive Officer Sundar Pichai at the company's headquarters in Mountain View, California, for a conversation that revolved around Modi's local manufacturing drive and India's state-backed technology push.

Key Google executives who visited India this month for the partnership talks included Ana Corrales, operating chief of its consumer hardware arm, and Maggie Wei, a senior director of global sustaining product operations, the people said.

Representatives for Lava, Dixon, Google and Foxconn didn't respond to requests for comment.

Google built about 9 million Pixel smartphones last year, according to Counterpoint Research, and the discussions in India underscore its plans to move production beyond China and Vietnam.

The Pixel is among the most sophisticated smartphones, and Google uses its flagship hardware product to showcase what its Android operating system and apps are capable of when optimized.

India is a key growth market for Google's services but the company has largely watched from the sidelines as cheaper Chinese phones have dominated the region.

Local assembly could help drive up Pixel sales, and if the phone effort is successful, Google could also move production of other hardware such as speakers to India, the people said.

Still, there is no certainty Google's talks will result in a deal and the company could opt not to build the Pixel in India, the people said.

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.