The Indian government has approved a joint venture between Dixon Technologies and Vivo Mobile India to manufacture smartphones and other electronic devices in the country. The clearance, granted under Press Note 3 of 2020, enables Vivo to expand its manufacturing footprint in India through a company in which Indian ownership holds the majority stake.
According to a stock exchange filing by Dixon Technologies, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry approved the proposal on July 8. The approval permits Vivo Mobile India to invest in a new smartphone manufacturing venture with Dixon. Under the arrangement, Dixon will hold a 51% stake, while Vivo Mobile India will own the remaining 49%.
The two companies had signed a binding term sheet for the partnership in December 2024. Following the government's approval, they have now executed the final joint venture and shareholders' agreements, outlining the ownership structure, governance, and operational framework of the new company.
How the Joint Venture Will Operate
As part of the partnership, Dixon and Vivo will establish a new company to manufacture smartphones and other electronic products in India. While the primary focus will be the production of Vivo smartphones, the facility will also be capable of manufacturing devices for other brands. The arrangement is expected to strengthen Dixon's manufacturing capacity while expanding its contract manufacturing business.
The partners will initially invest Rs 5 crore in the venture in proportion to their respective shareholding. Once incorporated under the Companies Act, 2013, the new entity will function as a subsidiary of Dixon Technologies. The incorporation process is expected to be completed within a year, after which the company will acquire selected manufacturing assets and assume part of Vivo's smartphone production operations in India.
Significance of the Approval
The approval is noteworthy because it was granted under Press Note 3, a policy introduced in 2020 that requires prior government approval for investments originating from countries sharing a land border with India, including China. The regulation was implemented during the Covid-19 pandemic and continues to remain in force amid broader national security considerations.
For Dixon Technologies, the partnership is expected to substantially expand its smartphone manufacturing business. The company has previously stated that the joint venture could eventually increase its annual smartphone production by 20–22 million units and generate approximately Rs 30,000 crore in additional annual revenue once the operations reach full capacity.
Dixon expects manufacturing under the joint venture to commence during the December quarter of the current financial year. The company estimates that around 11 million smartphones will be produced during FY27, with production expected to scale up further in FY28.
