Govt open to idea of China joint ventures in electronics manufacturing

Meity allows Dixon-Longcheer venture

The government is open to the idea of more Chinese companies setting up operations in India through joint ventures (JVs) with domestic firms, particularly in the electronics manufacturing sector, a senior official said on Friday, citing China’s significant role in global production.

 

Earlier in the day, homegrown electronics manufacturer Dixon Technologies received clearance from the Ministry of Electronics and Information Technology (Meity) to establish a JV with China’s Longcheer, through the latter’s Singapore-based subsidiary.

 

“In the electronics sector, 60 per cent of the manufacturing capacity is in China, and we want to grow our manufacturing in that area. So, some kind of work with China is something we can’t avoid,” the official said. “We have to be strategic as to what we do and how we do it, but it has to be done.”

 

The government is currently studying a range of frameworks to determine how best to review such JV proposals between Indian and Chinese companies, the official added. 

 

The Dixon-Longcheer partnership will take shape under a new entity named Dixtel Infocomm. Dixon will hold a 76 per cent stake in the venture, with Longcheer’s Singapore arm retaining the remaining 24 per cent. Once definitive agreements are finalised, Dixtel Infocomm will begin manufacturing and supplying smartphones, tablets, true wireless stereo devices, smartwatches, artificial intelligence personal computers, automotive electronics and health care devices in India.

 

Besides the potential flexibility for Chinese firms in electronics, the government is holding discussions with Beijing on the supply of critical minerals, including rare-earth magnets, the official said. Ministries concerned with industries that rely on rare-earth components have submitted their “opinion and findings” to the Ministry of External Affairs, which has raised the matter with its Chinese counterparts.

 

The central government is looking at the issue from three angles, another official explained. One is to temporarily import fully assembled components that include rare-earth magnets, treating the current blockage as a short-term disruption.

 

A second option under consideration is to diversify supply chains by tapping other geographies or by identifying alternative technologies that reduce reliance on rare-earth magnets.

 

A third approach, the official said, involved direct engagement with the Chinese government to restore supply chains for rare-earth magnets and other critical minerals.