Smartphone brands Vivo and Oppo are appointing Indian distributors in each state as the primary source of product supply to the trade to help resolve a long-standing point of conflict with the Centre.

Their aim is to localise the distribution structure in India, two industry executives said. Vivo and Oppo are the largest brands of China's biggest smartphone manufacturer BBK Group.

Until now, the brands had one or two Chinese-owned and managed distribution companies in each state, referred to as agents. They would in turn channel goods to retailers through local distributors. From next month, Vivo will scrap its agents in Delhi, Punjab and Haryana, having put in place Indian distributors for these states.

It will expand this model to other states, the executives said. Vivo is going to absorb the Indian employees of these Chinese distributors or place them in the local distributors they are appointing. The Chinese expats will return home, said the people cited above.

In any case, most of the expats who went back to China during the Covid pandemic are yet to return since they were not issued fresh visas by the Indian government amid rise in border tensions. This too had been impacting the business operations of the Chinese distributors, the executives said.

Vivo is likely to take up the office spaces currently occupied by the agents and convert them into its own state office, executives said as reported by EconomicsTimes.

Oppo has set up such a structure in Delhi as a pilot, replacing its Chinese distributor with an Indian one. This will be rolled out nationally. The company is in the process of appointing Indian distributors in other states, the executives said.

Almost all leading Chinese smartphone companies have been under intense scrutiny in India over the last years and are facing allegations such as custom duty and income tax evasion apart from money laundering.

Oppo, Vivo and Realme have started, or are in the process of starting smartphone manufacturing with Indian contract manufacturers such as Dixon Technologies and Karbonn Group, ET recently reported.