Dixon Technologies to Manufacture Telecom Devices in India
Dixon Technologies is expanding its manufacturing operations in India through a joint venture with Bharti Airtel. The partnership will establish a facility in the Madhya Pradesh economic zone to produce telecom and networking devices. This move aligns with the 'Make in India' initiative and reflects ongoing shifts in global electronics supply chains.
- The joint venture, 74% owned by Dixon and 26% by Bharti Enterprises, will manufacture telecom and networking products such as modems, routers, set-top boxes, and IoT devices. This initiative is designed to take advantage of the Indian government's Production Linked Incentive (PLI) scheme. - India's PLI scheme for telecom and networking products, notified in February 2021, has an outlay of ₹12,195 crores (approximately $1.63 billion) over five years to boost domestic manufacturing and reduce reliance on imports, which currently amount to around $6.7 billion annually. The scheme offers incentives ranging from 4% to 7% on incremental sales. - This partnership aligns with a broader strategic shift in India's industrial policy to move beyond final assembly and build capabilities in core component manufacturing, aiming to increase local value addition from 15-20% to a target of 40-50%. The government recently approved 22 proposals under its Electronics Components Manufacturing Plan, clearing investments worth $4.6 billion. - Dixon Technologies has rapidly scaled its manufacturing capacity to approximately 50 million smartphones and 40 million feature phones annually. In the second quarter of 2025, massive orders from Chinese brands helped Dixon surpass Samsung to become India's largest smartphone manufacturer by shipments, capturing over 22% of the market. - To support the electronics manufacturing ecosystem, the Indian government is considering labor law reforms, including flexible working hours and allowing worker housing within factory premises, which is currently restricted. These changes are aimed at increasing operational efficiency and encouraging more women to join the manufacturing workforce. - Geopolitical tensions and supply chain disruptions have accelerated the "friend-shoring" trend, with India positioning itself as a key alternative to China for electronics manufacturing. However, the country remains heavily dependent on imports for semiconductors, with 85-90% of chips being sourced from abroad, creating strategic vulnerabilities. - Bharti Airtel has previously faced challenges with domestically manufactured equipment, having escalated a dispute with another Indian vendor, Tejas Networks, over the alleged "sub-standard" quality of optical and broadband gear, which Tejas refuted. This history underscores the operational risks and quality control pressures inherent in localizing the telecom supply chain. - The Indian government is actively promoting the use of locally produced gear through public procurement policies. The Department of Telecommunications has mandated minimum local content of 50-65% for 36 types of telecom products, including routers and set-top boxes, for government contracts.
