India’s Smartphone Manufacturing Boom Enters New Phase with Vivo and Dixon Joint Venture
India has taken a significant step forward in its smartphone manufacturing journey, with the government approving a joint venture between Chinese smartphone brand Vivo and Indian electronics manufacturer Dixon Technologies. This development marks a new phase in the country’s smartphone manufacturing boom, which was kick-started by Apple’s expansion into the Indian market.
The joint venture between Vivo and Dixon Technologies will see the two companies come together to manufacture smartphones and other electronic products in India. The venture will be majority-owned by Dixon, with Vivo holding the remaining stake. This partnership is significant, as it reflects a broader shift in how Chinese smartphone brands are expanding their manufacturing presence in India through local partnerships.
According to Tarun Pathak, Research Director at Counterpoint Research, the approval of this joint venture creates a win-win situation for both players. The majority-Indian-owned structure provides Vivo with greater policy alignment, while giving Dixon the scale to deepen local value addition and pursue exports.
India has emerged as a major global smartphone manufacturing hub in recent years, with Apple and its suppliers expanding iPhone production in the country and diversifying supply chains beyond China. Government incentives have also helped attract global electronics manufacturers, boosting the country’s role in global smartphone production.
Apple’s India manufacturing expansion has largely been driven by suppliers such as Foxconn and Tata. However, Chinese smartphone brands are increasingly exploring partnerships with Indian companies, following New Delhi’s tightening of investment rules for neighboring countries in the wake of the 2020 border clashes with China.
Several Chinese smartphone brands, including Oppo, Vivo, and Xiaomi, have faced tax and regulatory investigations in India in recent years. This has made ceding majority control to an Indian partner a more sustainable path forward for these companies.
The Dixon-Vivo joint venture offers Chinese brands a more stable operating model, while aligning with India’s push for greater local participation in electronics manufacturing. For Dixon, this partnership could add annualized manufacturing volumes of about 20 million to 22 million smartphones, based on Vivo’s current sales.
This development is significant, as it reinforces Dixon’s position as one of the more reliable bets in India’s electronics build-out. The joint venture also builds on an expanding role for Dixon as a manufacturing partner for both global and Chinese smartphone brands in India.
Chinese brands dominate India’s smartphone market sales with 72% of the market, but contribute less than 10% of exports. This gap highlights the potential for Chinese brands to increase their exports from India, following Apple’s model.
The Indian government’s approval of the Vivo-Dixon joint venture is a positive step towards achieving this goal. It reflects a broader shift in how Chinese smartphone brands are expanding their manufacturing presence in India through local partnerships.
The joint venture will acquire certain manufacturing assets from Vivo, manufacture part of the company’s smartphone orders in India, and can also produce electronic products for other brands. This partnership is a significant development in the Indian smartphone manufacturing landscape and could become a template for similar arrangements across the industry.
The 51/49 venture structure, with Dixon holding the majority stake, is a key aspect of this partnership. This structure provides Vivo with greater policy alignment, while giving Dixon the scale to deepen local value addition and pursue exports.
For Vivo, this partnership is a strategic move to expand its manufacturing presence in India. The company has manufactured and exported smartphones from India for years, but the approved venture marks a shift towards a majority Indian-owned manufacturing structure.
The Chinese smartphone vendor retained the top spot in India’s smartphone market with a 23% shipment share in Q1, per Counterpoint. This partnership is a significant development in the Indian smartphone manufacturing landscape and could become a template for similar arrangements across the industry.
The joint venture will enable Dixon to deepen its value addition in the Indian market and pursue exports. This is a positive step towards achieving the Indian government’s goal of increasing local participation in electronics manufacturing.
According to Atul Lall, Managing Director of Dixon, the venture could add annualized manufacturing volumes of about 20 million to 22 million smartphones, based on Vivo’s current sales. This is a significant volume bump for a public company like Dixon, whose growth increasingly hinges on winning manufacturing contracts.
