Chinese JVs signal shift in India’s electronics manufacturing
CHENNAI: Indian-majority joint ventures with conditional Chinese investment are emerging as a new model for electronics manufacturing — combining global expertise with local control. This evolving structure, as seen in the Dixon–Longcheer and Epack–Hisense partnerships, illustrates the potential for scaling India’s electronics footprint under the Production Linked Incentive (PLI) and component manufacturing schemes.
With this, the country’s electronics sector is undergoing a shift from simple assembly to deeper component and design integration. Driven by PLI incentives and facilitated by new JV models, these structured partnerships — with Indian majority ownership, strategic Chinese participation, and compliance with FDI norms — are considered a practical middle path.
A key advantage of this model lies in its balance. As long as the rules remain clear, partnerships equitable, and technology localised within India’s value chain, such collaborations can support both domestic manufacturing and export-oriented production under the “Make in India” initiative.
Dixon and Epack Models
Dixtel Infocomm, a joint venture between Dixon Technologies (74%) and China-based Longcheer (26%), received government approval from MeitY on July 25. The venture will manufacture smartphones, tablets, smartwatches, AI PCs, automotive, and healthcare electronics. The equity split and focus on technology transfer and localization of non-semiconductor subcomponents align with India’s regulatory framework, marking a potential shift in policy.
In parallel, Dixon is forging multiple component-level partnerships with Chinese firms — including Chongqing Yuhai Precision (precision mechanicals), Kunshan Q Tech (camera/fingerprint modules), HKC (display modules), and is in talks with Vivo for handset manufacturing. These moves support deeper backward integration under the electronics component scheme.
Separately, Chinese appliance major Hisense has contracted Epack Durable Ltd to manufacture air-conditioners, refrigerators, washing machines, and small appliances at a new facility in Sri City, Andhra Pradesh. Production is set to begin by June 2025, targeting 1 million room AC units by FY28, with a strong export orientation.
Hisense plans to acquire up to a 26% stake in the Epack subsidiary operating the plant, bringing in design, tooling, and technical know-how. The collaboration is expected to generate up to US$1 billion in revenue over five years, with investments of ₹800–1,000 crore. Epack, India’s second-largest AC contract manufacturer, also serves brands such as Daikin, Panasonic, Haier, and Blue Star, with facilities across Andhra Pradesh, Rajasthan, and Uttar Pradesh.