Dixon-Vivo JV cleared for India smartphone manufacturing

NEW DELHI: Dixon Technologies said on Thursday the Indian government has approved its joint venture with Chinese smartphone maker Vivo Mobile, enabling them to set up a smartphone manufacturing unit in India.

The joint venture would be 51% owned by Dixon and 49% by Vivo Mobile India. It will function as an original equipment manufacturer (OEM) in India and will manufacture mobile phones for Vivo, besides taking orders for electronic goods from third party manufacturers, Dixon said in a filing.

The approval opens the way for a deal by some of China’s largest manufacturing companies into the Indian electronics sector, where their large investments in the country generally draw intense scrutiny.

Ventures by companies from countries sharing a border with India require government approval at the highest levels. The venture is part of a plan to expand smartphone manufacturing capacity in India as multinational companies ramp up local production in order to comply with a government incentive program.

The deal will add a big international client for Dixon and improve its status as one of the world’s most powerful electronics service providers. The venture will create a dedicated Indian manufacturing facility to service Vivo, an of their main markets.