This smartphone maker is eyeing a manufacturing venture in India with a Chinese partner

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Lava International eyes manufacturing venture in India with Chinese Huaqin technology

Smartphone maker Lava eyes India venture with Chinese partner

Indian smartphone maker Lava International Ltd. is in advanced talks with China’s Huaqin Technology Co. to set up an electronics manufacturing business in the South Asian country.

The company is reportedly aiming to win contracts from US and Chinese customers for electronics research and development, design and manufacturing, according to a letter from Lava to India’s technology ministry seen by Bloomberg News. Talks for the partnership are nearing completion, according to the letter.

The pact would give leverage to private companies as they seek to take on rivals such as Foxconn Technology Group. The Taiwanese giant, which assembles phones for Apple Inc., is among electronics companies that have developed production capacity in India to diversify beyond China and take advantage of incentives that are part of the prime minister’s aspirations Narendra Modi to make India a manufacturing hub.

Shanghai-based Huaqin, with more than 33,000 employees and revenue of $13 billion last year, designs and manufactures smartphones, laptops, tablets and smartwatches for customers including Vivo. , Xiaomi Corp., Samsung Electronics Co., Lenovo Group Ltd., Amazon.com Inc., and Acer Inc. Partnering with Lava would give Huaqin deeper access to one of the world’s leading growing electronics markets. faster in the world, which has an abundance of cheaper labor than in China. For Lava, the pact would provide much-needed capital and expertise as the company seeks to become a formidable player in electronics.

The company would employ more than 100,000 people and would “put India on the global design, supply chain and manufacturing map,” Lava said in the letter. “It would help bring the supply chain ecosystem and much-needed skills and technology to India.”

Representatives of Lava, Huaqin and India’s technology ministry did not respond to emails seeking comment.

A partnership deal has not been reached as details such as stakes are being finalized, people familiar with the matter said, asking not to be named as the plan is not public. Although the venture is under scrutiny by the Indian government, it is likely to be approved as it would elevate the country’s status as an electronics manufacturing hub and not threaten national security, the people said.

A bloody skirmish between India and China over a disputed Himalayan border in 2020 has led to a frosty relationship between the two nuclear-armed neighbours. New Delhi has subjected Chinese companies operating in the country, such as Xiaomi and rivals Oppo and Vivo, to scrutiny of their finances, leading to tax demands and allegations of money laundering.

The government has also used unofficial means to ban telecommunications equipment from Huawei Technologies Co. and ZTE Corp. Although there is no official policy prohibiting Chinese networking equipment, mobile operators are encouraged to purchase alternatives. India is also seeking to stop Chinese smartphone makers from selling devices for less than 12,000 rupees ($146) to revive its faltering domestic industry, people familiar with the matter have said.

The Lava-Huaqin company would have an advantage over other Chinese manufacturers because of its association with a domestic producer.

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