Govt To Scrutinise Dixon’s JV Firms With Chinese Companies: Report

The government will reportedly scrutinise the recent agreements of the homegrown electronics manufacturer Dixon Technologies with Chinese electronics companies Chongqing Yuhai and Kunshan Q Technology.

“Due process will be followed when their application comes under Press Note 3 rules,” an official was quoted as saying to PTI.

As per Press Note 3 rules, it is mandatory to obtain government approval for foreign investments from countries sharing a land border with India, including China, Afghanistan, Pakistan, Nepal, Bhutan, Bangladesh and Myanmar.

Only two days ago, reports surfaced that Dixon signed agreements with the two Chinese electronics component companies Chongqing Yuhai Precision Manufacturing and the Indian arm of Kunshan Q Technology, for manufacturing and sales of electronic components used in electronic devices like mobile phones and laptops, among others.

Inc42 has reached out to Dixon for comments on the development. The story will be updated based on the response.

As per news agency PTI, Dixon plans to set up a joint venture for the manufacturing business and supply of precision components for laptops, mobile phones, IoT systems and automotive applications through partnership with Chongqing Yuhai, where it is likely to hold a 74% stake in the JV and the rest will be owned by Chongqing.

Meanwhile, Dixon Technologies has signed a binding term sheet with Kunshan Q Tech Microelectronics India (Q Tech India) and its shareholders, Q Technology Singapore and Kunshan Q Technology International, for the proposed acquisition of 51% shareholding in Q Tech India.

The acquisition will be a mix of primary and secondary investments by Dixon and is subject to regulatory approvals and customary conditions.

Over a month, Dixon also sought government’s approval to partner with China-based HKC for a display module manufacturing unit. The partnership aims to produce display modules for smartphones, laptops and tablets.

Dixon is actively expanding its presence in electronics component manufacturing (ECMS), having initiated a project for display modules in late April. The company is now also exploring the production of camera modules, mechanical enclosures, and lithium-ion batteries, indicating a broader push into the ECMS sector. This move is part of a larger strategy to capitalise on the ECMS and aims to strengthen the domestic component ecosystem.

Meanwhile, Dixon Technologies partnered with Taiwan-based manufacturing company Inventec Corporation in a joint venture to manufacture notebook and desktop PC products, including components and servers, in India.