Dixon Technologies and Vivo Get Government Approval for India Manufacturing Venture

Dixon Technologies and Vivo Mobile India have formed a joint venture to produce electronic products and smartphones in India. This joint venture has been authorised by the Indian government. The proposition that had been pending under Press Note 3 of 2020 has been cleared by the government. Vivo can now use a firm that is majority-owned by Indians to develop its manufacturing activities in India, according to the approval.

On July 8, the request was authorised by the Department for Promotion of Industry and Internal Trade (DPIIT), which is part of the Ministry of Commerce and Industry, according to Dixon's stock exchange filing. Following the clearance, Vivo Mobile India will be able to put money into the Dixon-led joint venture that would create an Indian smartphone manufacturing unit. In the venture, Dixon will have 51% ownership, and Vivo Mobile India will have 49%.

JV to Drive India’s Smartphone Manufacturing

Dixon and Vivo have entered into a cooperation to establish a new company in India that would produce electrical gadgets and smartphones. While the majority of the company's smartphones will be Vivo models, it will also be able to make handsets for other companies. This implies that Dixon's contract manufacturing business will grow in addition to its production capability. Dixon and Vivo initially entered into a legally binding partnership agreement in December 2024.

The two businesses have finalised the joint venture and shareholders' agreements, which detail the management and operation of the new company, after receiving government permission. Consistent with their respective shares, the two corporations will put INR 5 crore into the new enterprise from the outset. The joint venture will be a wholly owned subsidiary of Dixon after it is incorporated under the Companies Act, 2013. Within a year, the process should be finished, and the new business will purchase some manufacturing assets and assume some of Vivo's smartphone production in India.

Dixon Beefing-Up Smartphone Manufacturing Capabilities

Dixon anticipates a considerable uptick in its smartphone manufacturing business as a result of the agreement. In the past, the business has stated that the initiative has the potential to increase yearly smartphone manufacturing by 20-22 million units. Also, once it's completely functioning, it will bring in an extra INR 30,000 crore in revenue every year. Production under the joint venture is expected to commence in the December quarter of the current fiscal year, according to Dixon.

In FY27, roughly 11 million smartphones are predicted to be created before activities are scaled up further in FY28. The government's clearance is noteworthy as well, given that it was issued under Press Note 3, a guideline that was implemented in 2020. China and other countries sharing a land border with India are required to obtain prior government approval for investments under this law. Broader security concerns have kept the policy in place since its implementation during the COVID-19 epidemic.