Chinese electronics manufacturers reportedly talking with Indian partners to form JV

As India's demand for electronics is growing, Chinese companies are looking to partner with Indian partners to capitalize on the rising market as India keeps its strict investment screening against China in place.

Hindu BusinessLine quoted an unnamed executive from a China-based electronics brand saying that several Chinese electronics components manufacturers are talking with India-based companies about potential joint ventures, with the Indian side controlling most of the stake.

A source told Hindu BusinessLine that it is inevitable to look beyond China in terms of manufacturing amid geopolitical tensions between the world's two powers, adding that as Foxconn expands its investments in India, others will have to follow suit.

Since the bloody clash between Chinese and Indian armies on a disputed Himayalan site, India has required investments from neighboring countries land-bordering India to be subject to prior approval rather than through the previously automatic route. Som Parkash, the union minister of state for Commerce and Industry of India, at the end of 2022, revealed that India received 423 investment proposals between April 2020 and November 2022 and approved only 98 applications.

India has launched Production Linked Incentives (PLI) schemes to encoiurage local manufacturing of electronics, textures, and automobiles since 2020, but no China-based companies applied for the scheme, which might due to the souring ties of the two countries after the 2020 bloody clash.

However, investments from Chinese electronics manufacturers are necessary for India to build a more developed electronics supply chain, and India may be adjusting its stance towards Chinese investments.

Business Standard reported in February that India might allow Chinese inward investments if they agree to form joint ventures with Indian partners, and The Economic Times reported that Apple, which is expanding its supplier base in India, had sent a list of 17 Chinese suppliers, most of which given initial clearance to invest or expand in India.

Some Indian electronics manufacturers began talking with Chinese counterparts at the end of 2022. The Economic Times quoted sources saying that Lava was talking with Chinese ODM Huaqin to form a joint venture in India, and the same with Dixon Technologies, Business Standard reports.

Source: Department of Commerce of India, July 2023