China’s Huaqin Seeks JV With Bhagwati For India Entry

Shanghai-based Huaqin Technology, the world’s largest original design manufacturer (ODM) for mobiles and tablets, is in discussions for a joint venture with homegrown original equipment manufacturer (OEM) Bhagwati Products Limited to foray into the Indian market.

As per Moneycontrol’s report, citing sources familiar with the matter, the negotiations are in advanced stages, and the final contours of the deal are likely to be finalised after the Lok Sabha Elections 2024.

Senior executives of Huaqin are currently visiting India and conducting due diligence, the report added.

Inc42’s queries to Bhagwati Products and Huaqin remained unanswered till the time of publishing the article.

Bhagwati Products is a beneficiary under the production-linked incentive (PLI) schemes for smartphones and IT hardware.

If the Huaqin-Bhagwati Products joint venture becomes a reality, it will benefit both parties. The JV will pave the way for Huaqin’s entry into India, one of the world’s fastest growing mobile markets as an ODM and EMS player.  

The Indian EMS industry was valued at $20 Bn in CY21 and is expected to grow at a CAGR of 32% over CY21-26, as per ET. 

The JV is expected to help Bhagwati bag new projects from Chinese smartphone brands like Oppo, Vivo and Realme, which are looking to partner with Indian firms to localise the production of their smartphones in India.

It’s pertinent to note that Huaqin had initiated talks with home-bred electronics maker Lava for a JV in 2022, but the deal could not be finalised due to several reasons, including the Enforcement Directorate’s investigation of Lava in a money laundering case.

The development comes at a time when India has escalated its crackdown on Chinese companies like Oppo, Vivo and Xiaomi that dominate the domestic smartphone market over allegations of money laundering, tax evasion, and other unlawful activities.

The pressure on Chinese smartphone brands comes as India seeks to boost domestic manufacturing, cut its long-standing reliance on imports and against the backdrop of border tensions with Beijing.

In line with its ‘Make In India’ initiative, the Indian government has been encouraging Chinese companies to partner with Indian firms for their local operations.

As per Inc42’s report, Oppo and Vivo are in talks with Dixon and Lava among others for their India operations.

Furthermore, China’s BBK Group will soon kick off the production of its Oppo, Vivo and Realme smartphones in India.