In some specific electronics JV, India may greenlight up to 26% of the Chinese stake, and a tech boost is reportedly expected as firms eye growth amid US-China trade tensions.
India may soon allow Chinese firms to hold up to 26 per cent equity in joint ventures (JVs) involving critical electronics components, according to a report by Moneycontrol. For other segments in the sector, the existing 10 per cent cap on Chinese equity is expected to remain unchanged.
The report revealed that Chinese companies are more willing to comply with India’s investment terms, as they see the country as a key market amid rising trade tensions with the US.
Domestic manufacturers have been notified during recent meetings that investment proposals from China will be assessed individually. No blanket approval for Chinese participation is on the table.
The proposed move aims to bring in essential technology transfers to India, where the electronics manufacturing ecosystem is still developing. Talks are ongoing between Indian firms and the Ministry of Electronics and Information Technology (MeitY) for greater clarity.
Lianchuang Electronics, a Chinese supplier to brands like Oppo and Samsung, is in discussions with Amber Electronics and Optiemus to enter India’s display, camera module, and IC chipset production space. It is the first Chinese firm to formally express interest in the ₹229.19-billion Electronics Components Manufacturing Scheme (ECMS), launched last week.
Indian firms are also engaging with component makers from China, Japan, South Korea, and Taiwan to explore JV possibilities.
Union Minister Ashwini Vaishnaw stated that the FDI Policy Circular 2020 will govern all foreign direct investment. Only firms with established design capabilities and Six Sigma quality standards will qualify for the ECMS.
Industry leaders welcomed the focus on design and quality. However, some warned that Six Sigma standards may be demanding for smaller firms to meet, even as the directive is crucial for creating local intellectual property and global competitiveness.
