The government has approved a joint venture between domestic white-label original equipment manufacturer Dixon Technologies (India) Limited and Vivo Mobile India (VMI) Private Limited, the former informed the stock exchanges late on Thursday. VMI is a subsidiary of China’s smartphone maker Vivo.
The approval for the JV was granted by the government on July 8, Dixon said in its filing to the stock exchanges. The two companies had entered into an agreement to form a JV for the manufacturing of electronic devices, including smartphones, on December 15, 2024.
The government nod for the JV is one of the first under the revised terms of Press Note 3, which was amended to allow non-controlling beneficial ownership of up to 10 per cent from land-bordering countries (LBCs) through the automatic route.
Earlier this year in March, the Department for Promotion of Industry and Internal Trade (DPIIT) had issued a notification easing foreign direct investment (FDI) norms for countries that share a land border with India.
Under the revised norms, investors from all such countries, such as China, would be allowed to hold up to 10 per cent non-controlling stakes in Indian companies through the automatic route, or without government approval, subject to sectoral caps.
Under the revised norms, government approval for inbound investment will also be needed if an Indian company with existing foreign investment undergoes a transfer of ownership in the future and the new beneficial owner is from a land-bordering country, including China, DPIIT had said.
In the yet-to-be-formed JV, Dixon Technologies will hold a 51 per cent stake, while Vivo Mobile India will hold 49 per cent. Neither Dixon nor Vivo Mobile India will hold any stake in the other’s company.
While the newly formed JV will manufacture smartphones for Vivo, it can also manufacture electronic products for other brands, Dixon said.
“This association will bolster the Company’s manufacturing excellence and superior execution abilities. This partnership will further strengthen the Company’s foothold in the Android smartphone ecosystem in India in line with Dixon’s strategic goals,” the company said.
