Tata In Talks For A Majority Stake In Vivo’s India Unit: Report

Tata Group is reportedly in discussions to acquire a majority stake in Vivo’s Indian unit, in response to government initiatives urging the involvement of domestic companies in operations such as manufacturing and distribution.

“The discussions have reached an advanced stage where talks began around valuations. Vivo has been seeking a higher valuation than what Tatas are offering. The Tatas are interested in the deal, but nothing has been finalised yet,” Moneycontrol reported, citing sources close to the matter.

This comes at a time when major Chinese smartphone companies in India are facing increased scrutiny, with allegations ranging from customs duty and income tax evasion to money laundering.

In April, Chinese smartphone companies Oppo and Vivo began discussions with several Indian companies in the handset sector as they seek potential partners for their operations in India. These discussions involved Dixon, Lava International, Optiemus, Bhagwati (Micromax), and UTL Neolyncs.

As per Moneycontrol, Bhagwati Products (Micromax) has taken over Vivo’s manufacturing facility in Greater Noida, where it is now hiring staff and preparing to commence smartphone production. 

The facility will operate under Bhagwati’s original design manufacturing joint venture with Huaqin. Approval from the Indian government is pending for this joint venture, the report added.

The report further added that Vivo has relocated its manufacturing operations to its new 170-acre factory in Greater Noida, which is expected to be fully operational in the near future.

Amid India’s ‘Make In India’ initiative, the government seeks to boost local control in the mobile phone sector. The Centre is also encouraging Chinese firms to partner with Indian companies, appoint Indian executives in key roles, and maintain a minimum 51% stake in joint ventures. 

Discussions also involve outsourcing smartphone manufacturing to domestic firms, leveraging Production Linked Incentive (PLI) benefits.

Meanwhile, BBK Group, the Chinese mobile phone maker, has partnered with Indian manufacturers Dixon Technologies and Karbonn Group to produce Oppo, Vivo, and Realme smartphones. Chinese brands like Xiaomi and Realme have also engaged Indian entities for distribution.

Additionally, Apple has significantly increased its manufacturing efforts in India amidst geopolitical tensions between Beijing and Washington. Currently, India accounts for approximately 7% of global iPhone production.

Apple began scaling up production in India in 2021 due to supply chain disruptions caused by COVID-19 restrictions in China and escalating tensions between the two global powers.