Talks for India-China electronics JVs gather pace after Modi-Xi meeting

The Chinese involvement will help build scale in high-value segments such as printed circuit boards (PCBs), display modules, camera sub-assemblies and batteries.

Dixon Technologies, India’s largest electronics contract manufacturer, is preparing to file a Press Note 3 application for a JV with Chongqing Yuhai Precision Manufacturing to produce laptop enclosures and other precision components. Dixon already has pending approvals for tie-ups with HKC and Vivo, and has recently received clearance for a JV with Longcheer, where it will hold 74%. Fresh ECMS applications for display modules, camera modules and precision parts are also in the pipeline.

Chinese appliance major Haier too is moving forward with plans to sell 49% of its Indian subsidiary while retaining an equal share, offering 2% to employees. According to a recent report by the Economic Times, negotiations with potential buyer Sunil Mittal had slowed down for two months but have now regained momentum.

Rahul Sharma, the founder of Bhagwati Products, the makers of Micromax brand of phones, confirmed that it has plans for JVs with Chinese firms under the ECMS scheme, with proposals in display and mechanics awaiting approval. “We will soon announce joint ventures and our investment plan,” Sharma told Moneycontrol, adding that China’s central role in global electronics manufacturing cannot be overlooked.

Other domestic players too have shared his view. “The situation has improved and looks better than before. We have submitted proposals and are awaiting approvals for planned JVs with leading Chinese companies,” one senior EMS executive said.

Another industry insider said that the government expects any Chinese investment to come with technology transfer. “The success of the new component policy hinges on Chinese vendor participation in key categories,” he added.

Industry sources have said that the Ministry of Electronics and IT (MeitY) sees selective Chinese investment in electronics manufacturing as vital for India’s ambitions. NITI Aayog has even proposed allowing Chinese firms to acquire up to 24% in Indian companies without triggering additional scrutiny.

One senior government official acknowledged that China remains indispensable to global supply chains, and with over 60% of electronics manufacturing concentrated there, India cannot build local capacity without engaging with China, he added.

Analysts have said that the current approach is a strategic recalibration, pointing to synergies between the two countries in electronics. More JVs and technology transfers in PCBs, displays, cameras and batteries are expected in the coming years, even if such moves raise concerns in the US, said industry experts.

"The world is moving towards a diversified semiconductor, component, and electronics manufacturing supply chain in the post-pandemic era to become more self-sufficient. China has realised that the best way to scale and survive is through cooperation with other economies. Tariffs have further accelerated this cooperation, creating a trifecta of supply chain strength across China, India, and Taiwan—key locations in terms of cost, capabilities, scale, and intent. " Neil Shah, vice president at Counterpoint, told Moneycontrol.

This alignment fits well with global tech companies’ diversification strategies. As a result, both China and India are adopting a more relaxed stance on promoting joint strategic cooperation with a shared vision of value creation and capture. Shah added. "However, long-term trust, along with well-defined and aligned best practices, will be critical for sustaining this cooperation and ensuring success."

While Chinese expertise is essential, it is learnt that MeitY is simultaneously encouraging partnerships with Japan, South Korea, Taiwan, Malaysia and Thailand, to diversify supply chains.