vivo gets Centre's nod under Press Note 3 for smartphone OEM venture with Dixon
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India's largest electronics manufacturing services (EMS) provider Dixon Technologies has signed a definitive joint venture agreements with vivo Mobile India, following government approval for the proposed partnership under Press Note 3 norms.
The company on Thursday said it has executed a joint venture agreement (JVA) and a shareholders' agreement (SHA) with vivo Mobile India to incorporate a joint venture company that will undertake the original equipment manufacturing (OEM) of electronic devices, including smartphones, in India. The development comes after vivo received approval from the government of India on July 8 for the investment under Press Note 3 of 2020, removing a key regulatory hurdle for the transaction.
Under the proposed structure, Dixon will hold a 51% stake in the joint venture, while vivo Mobile India will own the remaining 49%, giving the Indian electronics manufacturer management control of the venture. Neither company will hold any equity stake in the other.
What Press Note 3 means
The approval is important because Press Note 3, introduced in April 2020 after heightened geopolitical tensions between India and China, requires government approval for investments from entities based in countries that share a land border with India. The policy was aimed at preventing opportunistic takeovers of Indian companies during the pandemic and has since become a key regulatory checkpoint for Chinese investments and joint ventures.
With the clearance now in place, Dixon and vivo can proceed with incorporating the joint venture after fulfilling customary conditions precedent outlined in the agreement.
Beyond vivo manufacturing
The proposed JV will manufacture smartphones and other electronic devices in India. Besides executing part of vivo's smartphone OEM orders, the company said the venture will also be able to undertake OEM manufacturing for other electronic brands, potentially expanding its customer base beyond vivo.
Initially, the joint venture will be incorporated with a paid-up capital of ₹5 crore, contributed by Dixon and vivo in their respective shareholding ratio. At a later stage, the venture will acquire certain manufacturing assets through an asset purchase agreement and enter into a manufacturing and packaging agreement with vivo to execute part of its production orders.
The transaction is expected to be completed within one year, subject to the fulfilment of conditions precedent and receipt of any remaining statutory approvals.
Dixon said the partnership would "bolster the Company's manufacturing excellence and superior execution abilities" and further strengthen its foothold in the Android smartphone ecosystem in line with its long-term strategy.
The definitive agreements mark the culmination of a process that began in December 2024, when the two companies signed a non-binding term sheet to explore the joint venture. With the long-awaited regulatory approval now secured, the partnership is expected to deepen localisation of smartphone manufacturing in India.