Dixon Technologies (India) Limited to Longcheer Intelligence PTE. Ltd. Approval has been received from the Ministry of Electronics and Information Technology (Meity) to create a joint venture with. Under the terms of the agreement, the joint venture company will have a 74 percent stake in the share capital, while Longcheer will have the remaining 26 percent stake.
This approval from Meity has been received under Forex Management (Non-Lengistics) Rules, 2019. Joint venture will work through Dixtel Infocom Private Limited, which is currently a full -fledged subsidiary of Dixon, and will become a joint venture company on the effective closing date of fixed agreements.
This joint venture will focus on manufacturing and supply of many products including smartphones, tablets, True wireless stereo devices, smartwatch, AI PC, automotive electronics and healthcare devices. This collaboration is expected to promote Dixon’s original design manufacturer (ODM) expertise and localization of non-semiconductor sub-component manufacturing in India.
Strategic implications
This joint venture is ready to bring many strategic benefits for Dixon Technologies:
- Better ODM capabilities: Dixon will specialize in mobile phones and other electronics products for both domestic and export markets.
- Advance product design: This cooperation will enable Dixon to move beyond the assembly and develop in-house capabilities for smartphones, IOT devices and other consumer electronics.
- Localization of manufacturing: This venture will make the localization of non-semiconductor sub-component manufacturing, including procedural mechanics.
- Strong integration: This will ensure that both design and product development are in India.
The formation of a joint venture is subject to signing fixed agreements between Dixon and Longcheer.
Regulatory Context
Meety approval is the PN3 approval for investment by Longcheer in Dixtel, which is the proposed joint venture company. This is according to the NDI rules and the 2020 Consolidated Foreign Direct Investment Policy, especially according to the 2020 Press Note 3, which controls investment from units of countries sharing land border with India.
Ashish Kumar, Chief Legal Council and Group Company Secretary of Dixon Technologies, confirmed the approval and said that the company had taken the information in the record.