Indian smartphone maker Lava International Ltd. is in advanced talks with China’s Huaqin Technology Co. to create an electronics manufacturing venture in the South Asian nation.
The venture would aim to win contracts from the US and Chinese customers for research and development, design, and manufacturing of electronics products, according to a letter from Lava to India’s technology ministry seen by Bloomberg News. Talks for the partnership are close to being completed, according to the letter.
The pact would give the closely held companies heft as they seek to take on rivals such as Foxconn Technology Group. The Taiwanese giant, which assembles phones for Apple Inc., is among electronics companies that have built out production capacity in India to diversify beyond China and take advantage of incentives that are part of Prime Minister Narendra Modi’s aspirations to make India a manufacturing hub.
The venture would employ more than 100,000 people and “put India on the global map for design, supply chain and manufacturing,” Lava said in the letter. “It would help bring the supply chain ecosystem & much-needed skills and technology to India.”
While the venture will be closely scrutinized by the Indian government, it is likely to win approval because it would elevate the country’s status as an electronics manufacturing hub and doesn’t threaten national security.
The Lava-Huaqin venture would have an advantage over other Chinese manufacturers by its association with a domestic producer.