Dixon Tech Pursues ₹400 Cr JV with HKC
Dixon Technologies is set to create a joint venture worth ₹400 crore with HKC Corporation, a Chinese company, aimed at manufacturing display modules for smartphones, laptops, and televisions. With government approval still pending under Press Note 3, this initiative represents Dixon’s bold push for growth in India’s electronics manufacturing sector.
Summary:
In a strategic effort to enhance India’s electronics manufacturing capabilities, homegrown EMS leader Dixon Technologies is considering a joint venture with the Chinese display module company HKC Corporation. The ₹400 crore project aims to localize the production of essential display modules for smartphones, laptops, and televisions. Currently pending government approval under Press Note 3 due to HKC’s Chinese background, this initiative is a crucial step in Dixon’s strategy to diversify its offerings and align with India’s goal of becoming a global electronics hub. Additionally, the company plans to expand into the manufacturing of laptop components, batteries, and camera modules in its upcoming growth phase.
Dixon-HKC: A High-Stakes Partnership
Dixon Technologies, a key player in India’s electronics manufacturing space, is reportedly in advanced discussions about forming a joint venture (JV) with China-based HKC Corporation. HKC is a well-known manufacturer of display panels worldwide, recognized for its strong expertise in liquid crystal display (LCD) and organic light-emitting diode (OLED) technologies.
The proposed JV, valued at ₹400 crore, will focus on setting up a state-of-the-art display module assembly facility in India. The factory will manufacture essential display components for smartphones, laptops, and televisions — products that are witnessing booming demand in India’s growing digital economy.
This move marks a critical milestone for Dixon, enabling vertical integration in one of the most value-sensitive and import-dependent parts of the electronics value chain.
Press Note 3: Regulatory Hurdle for China-Origin Investments
However, the JV is currently under regulatory review. Since HKC is a Chinese-origin firm, the proposal is being evaluated under Press Note 3, a government directive issued in April 2020 that mandates prior approval for foreign investments from countries sharing land borders with India.
The Press Note was part of a broader policy to tighten scrutiny on Chinese FDI inflows after the India-China border tensions. According to government protocols, the Ministry of Commerce and Industry, along with the Department for Promotion of Industry and Internal Trade (DPIIT), is currently evaluating the proposal.
Dixon remains optimistic that the strategic importance of localizing display module production — currently heavily reliant on imports from China and South Korea — will help fast-track the clearance process.
Display Modules: The Missing Piece in India’s EMS Puzzle
Display modules constitute a large share of a smartphone or TV’s bill of materials (BoM). Currently, India imports a bulk of these modules with minimal local assembly or fabrication capabilities. Despite substantial gains under the Production Linked Incentive (PLI) schemes, component-level manufacturing in India remains nascent.
The Dixon-HKC JV would help reduce India’s dependency on imports, lower overall manufacturing costs for OEMs, and boost Dixon’s competitiveness as a contract manufacturer. Moreover, it would signal a strong step toward realizing the government’s “Make in India” and “Atmanirbhar Bharat” (self-reliant India) initiatives.
The new unit is also expected to serve global customers seeking China+1 manufacturing strategies to diversify their supply chains in light of ongoing geopolitical tensions and pandemic-induced disruptions.
Dixon’s Bigger Game Plan: Beyond Assembly
While Dixon is well-recognized for assembling smartphones, televisions, lighting products, and appliances for brands like Samsung, Motorola, Xiaomi, and boAt, it is now aiming to go deeper into the electronics manufacturing value chain.
Company representatives have stated that Dixon intends to make substantial investments to enhance capacities in the following areas:
– Laptop components are available through the newly expanded PLI scheme for IT hardware.
– Battery packs and modules in response to increasing demand for wearable electronics and consumer products.
– Camera modules play a crucial role in both smartphones and laptops.
This pivot from just assembling to manufacturing core components will enable Dixon to capture higher margins and become indispensable to OEMs looking for a full-stack EMS partner in India.
Government’s PLI Boost and Policy Support
The central government’s PLI schemes for mobile handsets, IT hardware, white goods, and semiconductors have been instrumental in encouraging domestic manufacturing. Dixon has already gained considerable advantages from the PLI schemes for mobile devices and IT equipment.
If the proposed Dixon-HKC JV gains government approval, the project is likely to qualify under the PLI for displays — a ₹6,000 crore scheme designed to support the creation of India’s display fabrication ecosystem. This would provide significant fiscal support in the form of incentives and subsidies, further de-risking the venture and enhancing its economic viability.
Industry Reaction and Investor Outlook
The electronics manufacturing industry is pleased with the announcement, as localizing high-value components such as display modules is regarded as a key advancement in the evolution of India’s EMS sector. If successful, the Dixon-HKC JV could attract more component-level players into the Indian market, triggering a multiplier effect across the value chain.
Dixon’s move signals a daring but strategic diversification, leveraging India’s large market, government support, and skilled workforce amid global supply chain trends. However, geopolitical and regulatory challenges will be essential to monitor.
Conclusion: A Strategic Leap in India’s EMS Evolution
Dixon Technologies’ pursuit of a joint venture with HKC comes at a crucial time when India is striving to shift from being a mere assembly hub to a high-tech manufacturing powerhouse. If greenlit, the partnership will not only mark Dixon’s ascent in the value chain but also serve as a blueprint for future Indo-foreign technology collaborations.
As India strengthens its role in the global electronics supply chain, ventures like Dixon’s display module initiative will help reduce import reliance, increase exports, and enhance national capabilities. With appropriate policy support, this could mark a significant milestone in India’s electronics journey.
The image added is for representation purposes only
