Government of India has approved a joint venture (JV) between Dixon Technologies (India) Limited and Vivo Mobile India Limited for manufacturing smartphones and other electronic devices in India. This marks one of the first major approvals for Chinese investment in a strategic sector since the introduction of stricter FDI norms in 2020.
The joint venture will function as an Original Equipment Manufacturer (OEM), with Dixon holding a 51% stake and Vivo Mobile India holding the remaining 49%.
Key Highlights
Dixon–Vivo Joint Venture
- Established to manufacture: Smartphones and Electronic devices
- Ownership structure: Dixon Technologies – 51% and Vivo Mobile India – 49%
- Will operate as an Original Equipment Manufacturer (OEM).
Customs Duty Exemptions to Boost Domestic Manufacturing
- Ministry of Finance has introduced significant customs duty exemptions to strengthen domestic electronics manufacturing.
Duty exemptions have been granted on:
- 85 capital goods used in lithium-ion cell manufacturing.
- Inputs used in manufacturing: Display assemblies and Inductor-coil modules for wireless charging in mobile phones.
Validity
- Exemptions remain in force until March 2029.
Objective
- Promote domestic manufacturing.
- Deepen value addition in India’s electronics ecosystem.
- Encourage local production of:
- Automotive display assemblies.
- Medical display assemblies.
- Industrial display assemblies.
- Wireless charging components for smartphones.
Relaxation for Chinese Power Equipment Manufacturers
- The approval follows another policy decision allowing four Chinese power equipment manufacturers operating in India to participate in government tenders for critical power projects.
- The companies are: Nanjing Electric India, TBEA Energy, Taikai Electric (India), New Northeast Electric India
- These companies manufacture: High-voltage switchgear, Transformers, Wires, Gas-insulated switchgear (GIS). These products are essential for electricity transmission infrastructure.
Public Procurement Exemption
- The four companies have been exempted from provisions requiring firms from countries sharing a land border with India to register with the designated Indian authority before participating in government procurement.
Background: Press Note 3 (2020)
What is Press Note 3?
Press Note 3 (2020) was issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
Key Provision
- Made government approval mandatory for Foreign Direct Investment (FDI) from countries sharing a land border with India.
Purpose
- Prevent opportunistic takeovers of Indian companies during the COVID-19 pandemic.
- Strengthen national security following the Galwan Valley clash in 2020.
Countries Covered
Although applicable to all neighbouring countries sharing a land border with India, it primarily affected Chinese investments because:
- Investments from Bangladesh and Pakistan already require the government route.
- Investments from Nepal, Bhutan, Myanmar, and Afghanistan constitute only a small share of India’s FDI inflows.
Emerging Policy Shift
The recent approvals indicate a gradual move toward a more balanced economic engagement with China, influenced by changing global trade dynamics and evolving economic priorities.
About Original Equipment Manufacturer (OEM)
An Original Equipment Manufacturer (OEM) is a company that manufactures products or components that are marketed either under its own brand or supplied to another company for branding and sale.
In this case, the Dixon–Vivo JV will manufacture smartphones and electronic devices as an OEM.