Phone maker Lava is eyeing an electronics manufacturing joint venture with China’s Huaqin. | So Good News

Indian smartphone maker Lava International Ltd. China’s Huaqin Technology Co. to create an electronics manufacturing plant in the South Asian country. and advanced discussions are underway.

The venture will focus on electronics research and development; According to a letter from Lava to India’s Ministry of Technology, it intends to win contracts from US and Chinese customers for design and manufacturing. The letter stated that partnership talks are nearing completion.

The deal could give the closely held companies momentum as they look to take on rivals such as Foxconn Technology Group. Apple Inc. The Taiwanese giant, which assembles phones for the US, is one of the companies to boost manufacturing capacity in India and take advantage of incentives that are part of Prime Minister Narendra Modi’s vision to become a manufacturing hub in India.

Shanghai-based Huaqin, with more than 33,000 employees and sales of more than $13 billion last year, makes smartphones for clients including Vivo, Xiaomi Corp., Samsung Electronics Co., Lenovo Group Ltd., Amazon.com. laptops, Design and manufacture tablets and smart watches. Inc. and Acer Inc. And the partnership with Lava will give Huaqin deeper access to one of the world’s fastest-growing electronics markets, cheaper than labor in China. For Lava, The deal will bring in much-needed capital and expertise as the company seeks to become a major electronics player.

The venture will employ more than 100,000 people and India will design, It will be put on the global map for supply chain and manufacturing, Lava said in the letter. “It will bring much-needed expertise and technology to the supply chain ecosystem and India.”

Lava, Representatives from Huaqin and India’s technology ministry did not respond to emails seeking comment.

A partnership agreement has not yet been finalized as details such as stakes have been finalized by the people familiar with the matter, who asked not to be named because the plan is not public. The venture will be closely scrutinized by India’s government, but the people said it was likely to win approval because it would boost the country’s status as an electronics manufacturing hub and not threaten national security.

In 2020, a bloody battle between India and China on a disputed Himalayan border has frozen relations between the two nuclear-armed neighbors. New Delhi has shut down its financial scrutiny of Chinese companies operating in the country, such as Xiaomi and rivals Oppo and Vivo, prompting tax demands and allegations of money laundering.

Government Huawei Technologies Co. and ZTE Corp. Unofficial methods were also used to block telecom equipment. Although there is no official policy prohibiting Chinese networking equipment. Wireless providers are encouraged to purchase alternatives. India is also seeking to ban the sale of devices cheaper than 12,000 rupees ($146) to jump-start its domestic industry, people familiar with the matter said.

The Lava-Huaqin joint venture will have an advantage over other Chinese manufacturers by integrating with a local manufacturer.

— With the help of Gao Yuan