Dixon has secured an order from Oppo for making phones, with an order size of around 5-6 lakh units per month.
Chinese firms have finally decided to give business to local manufacturers, after resisting opening up their supply chain and production work to Indian companies. This development is attributed to persistent nudging by the government and is a significant victory for local players.
Many of the local players need manufacturing contracts after winning benefits under the production-linked incentive (PLI) scheme for smartphones. The PLI payout is contingent on companies fulfilling specified commitments towards new investments and business activity.
Dixon Technologies and Karbonn could be among the frontrunners for receiving new business from Chinese companies such as Oppo and Vivo. Dixon has reportedly already secured a large manufacturing order from Oppo for making phones, with an order size of around 5-6 lakh units per month.
The order came through one of Oppo’s original design manufacturers (ODMs), which has now tapped into Dixon. Karbonn, which had won PLI benefits under UTL Neolyncs, is also in advanced discussions. Reportedly, Indian electronics manufacturers are also being tapped into.
While Chinese companies such as Vivo and Oppo have their own manufacturing facilities in India, they also outsource work through their ODMs, such as Longcheer, Huaqin, and Wingtech. These ODMs are crucial partners in the smartphone ecosystem of Chinese companies and have a strong say in allotting manufacturing business.
The government intervened in the matter after finding that Chinese companies were not ready to open up their supply chains to Indian players, despite virtually controlling the broader smartphone business in India. Officials have expressed a desire for more Chinese companies to provide technology and manufacturing opportunities to Indian players, especially as they will also come with PLI benefits.
Except for Samsung and Apple, which cumulatively have around 25% of the Indian smartphone market, the majority of the business is with Chinese makers such as Xiaomi, Oppo, Vivo, RealMe, and OnePlus.
