India has approved a manufacturing joint venture between China's Vivo and local electronics manufacturer Dixon Technologies, allowing the long-delayed partnership to move forward under the country's investment rules for neighboring countries (09/07).

The approval enables Vivo to proceed with the manufacturing partnership first announced in December 2024 after receiving clearance under investment rules introduced in 2020. Those rules require additional government scrutiny of investments from countries sharing a land border with India, including China.

Vivo-Dixon Venture to Manufacture Smartphones in India

According to a stock exchange filing by Noida-based Dixon Technologies, the joint venture will acquire certain manufacturing assets from Vivo and produce part of the company's smartphone orders in India. The venture will also be able to manufacture electronic products for other brands.

The partnership will be owned 51% by Dixon and 49% by Vivo.

Partnership Reflects Shift in Manufacturing Strategy

The ownership structure reflects a broader shift in how Chinese smartphone brands are expanding manufacturing operations in India through partnerships with local companies.

Analysts believe the structure could become a model for similar partnerships across the industry and help expand India's smartphone manufacturing story beyond Apple.

India has become a major global smartphone manufacturing hub as Apple and its suppliers increased iPhone production in the country while diversifying supply chains beyond China. Government incentives have also attracted global electronics manufacturers and strengthened India's role in global smartphone production.

Apple Leads Exports as Chinese Brands Focus on Domestic Market

According to Counterpoint Research data shared with TechCrunch, Apple accounts for 57% of India's smartphone exports by volume.

Chinese smartphone brands hold a combined 72% share of India's smartphone market sales but contribute less than 10% of smartphone exports. The difference highlights the potential for higher exports if these companies expand overseas shipments from India.

Apple's manufacturing expansion in India has largely been driven by suppliers including Foxconn and Tata.

Chinese smartphone brands have increasingly explored partnerships with Indian companies after New Delhi tightened investment rules for neighboring countries following the 2020 border clashes with China. Oppo, Vivo, and Xiaomi have also faced tax and regulatory investigations in India in recent years.

Venture Expected to Increase Manufacturing Capacity

Tarun Pathak, Research Director at Counterpoint Research, said the partnership would benefit both companies.

"The approval of this joint venture creates a win-win for both players."

He added that the majority Indian-owned structure provides Vivo with greater policy alignment while giving Dixon the scale to deepen local value addition and pursue exports.

Vivo has manufactured and exported smartphones from India for years, but the approved venture marks a shift toward a majority Indian-owned manufacturing structure. According to Counterpoint Research, Vivo retained the top position in India's smartphone market with a 23% shipment share in the first quarter.

During Dixon's May earnings call, Managing Director Atul Lall said the joint venture could add annualized manufacturing volumes of about 20 million to 22 million smartphones based on Vivo's current sales.

Dixon already manufactures smartphones for Xiaomi. The Vivo partnership expands the company's role as a manufacturing partner for both global and Chinese smartphone brands in India.

PHOTO: VIVO

This article was created with AI assistance.

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