India is poised to ease restrictions on Chinese investment in the electronics manufacturing sector, opening the door to China JV electronics manufacturing under tightly controlled conditions.
🧭 Policy Shift in Focus
According to multiple government sources, the Ministry of Electronics and IT (MeitY) is preparing to permit Chinese companies to invest in joint ventures with Indian firms—but only if they transfer technology, maintain Indian control, and meet value‑addition criteria
Under the proposed guidelines:
- Chinese firms may hold up to 26% equity in joint ventures focused on critical electronic components, while a 10% cap remains for most other categories
- Control of management and board decisions must remain with the Indian company
- Technology transfer must be part of the agreement to avoid low‑value assembly-only operations
✅ Early Precedent: Dixon‑Longcheer Deal
On July 25, 2025, the government granted approval for Dixon Technologies to form a JV with Chinese ODM Longcheer via its Singapore unit. The Indian partner will hold 74% stake and Longcheer just 26%
The JV, operating under the name Dixtel Infocomm, will produce smartphones, AI PCs, TWS earbuds, automotive electronics, healthcare devices, and more—emphasizing localisation and ODM expertise
🎯 Strategic Rationale
India’s electronics ecosystem still heavily depends on Chinese supply chains, especially for components like camera modules, display panels, PCBs, and integrated circuits.
To scale local manufacturing and exports—particularly under the ₹22,919‑crore Electronics Component Manufacturing Scheme (ECMS)—government officials believe leveraging Chinese experience and investment is necessary
This step aligns with broader policy goals to move India’s local value addition in electronics beyond the 20–30% range and close the gap with China’s 38% figure
⚠️ Ongoing Geopolitical & Approval Hurdles
Approval processes for JVs with Chinese firms remain cautious. Projects are subject to delays and scrutiny—often influenced by geopolitical sensitivities and concerns over China’s stance toward Pakistan
While signaling more openness, officials stress that no blanket policy change is forthcoming—each proposal will undergo individual assessment
📌 Key Facts at a Glance
| Parameter | Details |
|---|---|
| Allowed Equity for China JV | Up to 10%, or 26% in select component categories |
| Must-have Terms | Technology transfer clause; Indian majority control |
| First GOV-approved JV | Dixon–Longcheer (Longcheer 26%, Dixon 74%) |
| Role of PLI / ECMS scheme | Chinese JVs eligible for incentives if meeting tech-sharing criteria |
| Strategic Goal | Boost value-additions; develop local component ecosystem |
| Challenges | Case-by-case reviews; geopolitical tensions influencing approval timelines |
🌐 Broader Context
India’s “Make in India” and Production‑Linked Incentive schemes have dramatically expanded electronics assembly—but local intellectual property creation and higher-value manufacturing have lagged.
Domestic value addition in electronics remains around 20%, while India aims to push this above 30% through partnerships that embed technology and design capabilities domestically
Allowing controlled Chinese JVs is seen as a pragmatic recalibration—balancing self-reliance with the need to tap into global expertise and scale The Economic Times.
🔚 Bottom Line
India will now allow China JV electronics manufacturing—but under carefully defined terms: minority equity caps, Indian control, technology transfer clauses, and rigorous project-level scrutiny. The move reflects a strategic shift, acknowledging China’s dominance in electronics production while safeguarding national interests and aiming to build a stronger local industry.
