India’s ambition to become a global electronics manufacturing powerhouse is driving a fresh wave of technical collaborations between Indian and Chinese companies, even as geopolitical tensions and regulatory scrutiny remain high. With the government rolling out a ₹23,000-crore incentive scheme to ramp up electronics parts production, both sides are recalibrating their strategies—shifting from traditional joint ventures to technology-sharing partnerships and minority equity deals.
Recent developments highlight a pragmatic shift in how Indian and Chinese firms are approaching partnerships. Voltas, a major Indian appliances brand, recently attempted to revive a joint venture with China’s Highly Group for a compressor plant. However, the deal fell through due to prolonged government approvals and ongoing border tensions. Instead, Highly offered a technical alliance—marking a reversal from its earlier stance of rejecting tech-only tie-up. This reflects a broader trend: Chinese companies, once hesitant, are now more open to technology transfer and minority joint ventures, while Indian firms seek to secure access to advanced manufacturing know-how without ceding management control.
The government’s new Electronics Component Manufacturing Scheme aims to reduce India’s dependence on imports and boost domestic value addition. Under the policy, Chinese firms can participate in the incentive program—but only via joint ventures with Indian partners, and with strict limits on equity ownership. For most components, Chinese ownership is capped at 26% (and up to 49% in select cases), with Indian partners retaining management control and mandatory technology transfer as a condition for approval. Every joint venture must also pass rigorous Foreign Direct Investment (FDI) scrutiny to safeguard national security interests.
Despite the hurdles, Indian electronics manufacturing services (EMS) firms are racing to forge partnerships with established Chinese suppliers. Companies like Dixon Technologies, Micromax, Zetwerk, and Syrma SGS are actively pursuing deals for display modules, camera sub-assemblies, printed circuit boards, and more. These collaborations are seen as critical to remaining competitive, given Chinese firms’ entrenched role in global supply chains and their expertise in high-precision components.
Micromax has already inked a joint venture with China’s Huaqin, while Dixon Technologies is partnering with HKC for display production. Other firms are focusing on technology licensing, local R&D, and even potential acquisitions to accelerate the adoption of advanced manufacturing processes.
The policy shift is already yielding visible results. Chinese manufacturers operating in India are now exporting “Made in India” electronics to markets in West Asia, Africa, and the US, signaling a new era of cross-border industrial cooperation and value addition. The government’s goal is to raise domestic value addition in electronics from the current 18–20% to 35–40% by 2030, supporting its broader $500 billion electronics production target.
While strategic collaboration is on the rise, both sides remain cautious. Regulatory bottlenecks, security concerns, and the need for government clearance continue to shape deal structures. Yet, the willingness of Chinese firms to transfer technology and accept minority stakes, combined with India’s drive for self-reliance, is fostering a new model of partnership—one that balances opportunity with national interest.
