Key India-China electronics deals stuck amid Beijing's reluctance on tech transfer: Report

Beijing appears to be scrutinising all significant transactions involving India to ensure that Chinese intellectual property and advanced knowhow remain protected

India's electronics industry is growing increasingly uneasy over what executives describe as inconsistent policy signals from China, particularly on technology transfer - an issue they say is slowing or stalling collaborations and joint ventures, a report by the Economic Times said on Wednesday.

PG Electroplast Ltd's MD-operations, Vikas Gupta, told analysts on November 17 that its planned technical partnership with a Chinese company remains stuck.

"Nothing is getting resolved… our partner is still waiting for the go-ahead from the Chinese government side," he said, noting that the deal was originally expected to be completed by April-May, ET reported. While ET earlier identified China's Highly Group as the potential partner, PG Electroplast has not publicly confirmed the name.

Another major hurdle highlighted by ET involves Hisense Group, one of China's largest television and appliance makers. The company has paused its plan to acquire up to 26% in a new Epack Durable manufacturing facility because such strategic investments need clearances from both Beijing and New Delhi.

A senior executive familiar with the matter told ET that Hisense wants to focus its capital on brand-building and marketing while continuing to outsource manufacturing to partners such as Epack, Bhagwati Products and Dixon Technologies.

Delays are also affecting the Bharti Group's proposed acquisition of a 49% stake in Haier India. Despite internal processes being completed, the agreement has yet to be signed as it awaits approval from the Chinese authorities, missing multiple internal deadlines, ET reported. The most recent target date passed two weeks ago.

Executives told ET that Beijing appears to be scrutinising all significant transactions involving India to ensure that Chinese intellectual property and advanced knowhow remain protected. At the same time, any Chinese investment must also be reviewed under India's Press Note 3 framework, which mandates government approval for FDI from neighbouring countries. A person familiar with the Haier-Bharti negotiations told ET that China has been cautious globally in approving both technical collaborations and equity partnerships, but the pending India deals are expected to move once Beijing gives the nod.

Epack MD Ajay Singhania told ET that the Hisense-dedicated plant is ready, with AC trial production completed and mass production set to begin in December, followed by washing machines. He added that Hisense intends to use India as an export base for the Middle East and Africa, with Chinese expatriate staff overseeing manufacturing operations.

Large electronics manufacturers, including Dixon, reiterated to ET that partnerships with Chinese firms remain vital as India ramps up local component production and seeks to deepen value addition. Several joint proposals under the electronics component manufacturing scheme are still awaiting approval.

ET also reported that Beijing recently cleared only four Indian companies-Hitachi, Continental, Jay Ushin and DE Diamonds-to import rare earth magnets, leaving many other applications pending. China, which earlier supplied 80-85% of India's AC compressors, now accounts for about 45-50% following India's import curbs and the rollout of production-linked incentive schemes.