After Apple, India’s smartphone manufacturing boom enters new phase with Vivo JV

On Thursday, India greenlit a manufacturing joint venture between Chinese smartphone giant Vivo and local firm Dixon Technologies, signaling a transformative moment in the nation’s smartphone production sector. This partnership, which had been on hold since its announcement in December 2024, is expected to elevate India’s position as a global hub for smartphone manufacturing, especially after Apple's significant contributions to the industry. The approval comes as part of stringent investment regulations established in 2020, targeting investments from nations sharing land borders with India, including China. Under the terms of the joint venture, Vivo will acquire specific manufacturing assets and will start producing some of its smartphone orders locally, while also having the capacity to manufacture electronic products for other brands. With a structure of 51% ownership by Dixon and the remaining 49% by Vivo, this venture exemplifies a notable trend of Chinese brands collaborating with Indian firms to expand their manufacturing footprint. Industry analysts suggest that this model may serve as a framework for similar partnerships across the sector, potentially broadening the narrative of India’s smartphone manufacturing prowess beyond just Apple. In recent years, India has positioned itself as a major player in global smartphone production, largely due to Apple's expanded manufacturing operations, which have diversified supply chains away from China. Government incentives have also played a crucial role in attracting international electronics firms, bolstering India’s status in the global market. Apple currently accounts for 57% of India's smartphone exports by volume, as reported by Counterpoint Research. In contrast, Chinese brands hold a significant 72% share of the domestic smartphone market but contribute less than 10% to exports. This discrepancy highlights the potential for increased exports if these brands choose to follow in Apple's footsteps. The expansion of Apple’s manufacturing capabilities in India has primarily been supported by suppliers like Foxconn and Tata. Meanwhile, in the wake of tightened investment regulations post-2020 border tensions with China, several Chinese brands, including Oppo, Vivo, and Xiaomi, are now seeking partnerships with Indian manufacturers. This trend is partly driven by recent tax and regulatory scrutiny these companies have faced in India. According to Tarun Pathak, research director at Counterpoint Research, local partnerships such as the one between Dixon and Vivo present a promising model for Chinese brands, offering stability while aligning with India's goal for increased local involvement in electronics manufacturing. "This joint venture is a win-win for both entities," Pathak stated, emphasizing that the majority-Indian ownership structure aligns Vivo more closely with Indian policy while providing Dixon with the scale needed to enhance local value addition and increase exports. While Vivo has been manufacturing and exporting smartphones from India for several years, this new venture marks a significant shift toward a predominantly Indian-owned manufacturing framework. Vivo currently leads the Indian smartphone market, boasting a 23% shipment share in the first quarter, according to Counterpoint. For Dixon, recognized as India’s largest electronics manufacturing services provider, this partnership could significantly boost its manufacturing capacity, potentially adding 20 to 22 million smartphones annually, based on Vivo’s sales figures. This increase could fortify Dixon’s standing as a viable manufacturing partner for both global and Chinese smartphone brands in India, enhancing its role in the country's expanding electronics landscape.