According to reports from Business Standard, Vivo and Dixon Technologies have announced a joint venture that will take over the Chinese company's factory in Greater Noida. The Indian manufacturer expects this partnership to add approximately 20 million units to its current production capacity of 35 million smartphones. Some of this increased production may be utilized for other brands, while there are also hopes that a fraction of the output will be exported from the facility. The timing of this partnership is strategically aligned with India's broader smartphone manufacturing initiative, as reported by Counterpoint Research research director Tarun Pathak, who noted that phone brands are striving to reduce costs on parts.
The government anticipates that India's smartphone manufacturing scheme will generate roughly 60,000 direct employment opportunities over five years and drive total mobile-phone production worth about ₹39 trillion (around $405 billion). As reported by Counterpoint Research, the depreciation of the Indian rupee makes imported components more expensive, thereby incentivizing local procurement. This economic reality is driving companies to reconsider their manufacturing strategies, with Apple already benefiting from its deep relationships with Indian contract manufacturers Foxconn and Tata Group. Among Chinese brands, Vivo recently received clearance for its joint venture with Dixon Technologies, positioning it to capitalize on these favorable conditions.
Chinese companies currently hold almost three-fourths of the Indian mobile market, with Vivo itself accounting for almost a quarter of this market share. However, these companies have not scaled up manufacturing and exports from India to meaningful levels despite their market dominance. According to Pankaj Mohindroo, who leads the India Cellular and Electronics Association, India ought to aim for 35% to 40% of global mobile phone production. The government appears to view the Vivo-Dixon JV as a strategic approach to address this situation and encourage greater manufacturing investment in the country, with India's achievements in iPhone assembly demonstrating its ability to secure a larger share of worldwide manufacturing.
The initial move in 2020 to shut off all Chinese investment followed clashes on the Line of Actual Control in the Himalayas, reflecting a moment when complete decoupling from the Chinese economy was considered the only option. However, this approach was clearly not sustainable over time, and the government now appears to have decided that the benefits of allowing Chinese investment in certain sectors outweigh any threat perception. The policy shift recognizes that complete exclusion of Chinese investment and technology is not feasible for India's economic development, with New Delhi realizing that it will not easily break into complicated supply chains while simultaneously locking out Chinese investment and technology.
