India’s Smartphone Manufacturing Revolution Advances with Vivo Joint Venture Following Apple

On Thursday, India granted approval for a collaborative manufacturing venture involving Chinese firm Vivo and local producer Dixon Technologies, signaling a potential new chapter in the country’s smartphone manufacturing landscape, which has been significantly shaped by Apple’s influence.

This approval enables Vivo to kick off a long-awaited partnership originally announced in December 2024. The investment was cleared by the Indian government under regulations established in 2020, which necessitate additional scrutiny for investments from nations that share a land border with India, including China. The joint venture will take over some manufacturing assets from Vivo, produce a portion of the company’s smartphone orders within India, and have the capacity to manufacture electronic goods for other brands, as stated in a filing by Dixon, based in Noida.

The venture, structured with Dixon having a 51% ownership stake and Vivo holding 49%, indicates a notable trend in which Chinese smartphone manufacturers are increasingly relying on local partnerships for their expansion in India. Analysts note that this arrangement could serve as a model for similar collaborations across the industry, enhancing India’s narrative in smartphone manufacturing beyond just Apple.

In recent years, India has established itself as a significant hub for global smartphone manufacturing. The expansion of Apple and its subsidiaries in producing iPhones domestically has played a pivotal role in this shift, as companies seek to diversify their supply chains away from China. Additionally, government incentives have lured international electronics manufacturers, further solidifying India’s position in the global smartphone market.

According to data from Counterpoint Research, Apple now comprises 57% of India’s smartphone exports by volume. Chinese brands, while holding 72% of India’s smartphone market sales, contribute less than 10% to exports, indicating substantial growth potential should they follow Apple’s lead and increase exports from India.

Apple’s growth in India has largely been facilitated by suppliers like Foxconn and Tata. In contrast, Chinese smartphone companies are now seeking partnerships with Indian firms after India imposed stricter investment regulations for neighboring countries following border disputes with China in 2020. Many of these firms, including Oppo and Xiaomi, have also come under scrutiny from tax and regulatory bodies in India, making a majority partnership with an Indian company a more viable option moving forward.

Partnerships like the Dixon-Vivo venture afford Chinese brands a more stable operational framework, while aligning with India’s vision for increased local participation in electronics manufacturing, remarked Tarun Pathak, research director at Counterpoint Research.

“The authorization of this collaboration benefits both parties,” Pathak said. He mentioned that the structure, with Dixon as the majority owner, allows Vivo to align more closely with policy requirements, while also enabling Dixon to enhance local value creation and explore export opportunities.

Vivo has been involved in producing and exporting smartphones from India for several years, but the newly approved joint venture represents a significant move towards a majority Indian-owned manufacturing model, cementing its presence in the world’s second-largest smartphone market. Vivo continues to lead this market, holding a 23% shipment share in Q1, according to Counterpoint.

For Dixon, India’s foremost electronics manufacturing services enterprise, this venture could mean an addition of approximately 20 to 22 million smartphones in annual production, based on Vivo’s current sales, as pointed out by Managing Director Atul Lall during the company’s earnings call in May. This represents a substantial increase for a public company whose growth is increasingly dependent on securing similar manufacturing contracts.

Dixon already produces smartphones for Xiaomi, making the Vivo partnership an extension of its growing role as a manufacturing ally for both global and Chinese smartphone brands in India, thereby reinforcing its status as a reliable player in India’s electronics sector development.