Chennai: Indian companies, especially those in the electronics and electrical sectors, are tapping investments from China, despite the government restrictions on FDI from China. After Dixon and Micromax’s Bhagwati, a few more companies are expected to enter partnerships with Chinese companies.
“Several Indian electronics manufacturers are in discussions with Chinese companies for partnerships, joint ventures and technology transfer. Under the ECMS scheme, the companies are seeking investments from countries, including China, South Korea, Taiwan and Japan,” said Ashok Chandak, president of IESA and SEMI India. These partnerships are meant for manufacturing PCB components, IC components, display modules, and image sensor modules.
A joint venture between Dixon Technologies and Chinese original design manufacturer (ODM) Longcheer Intelligence had recently received government approval. Bhagwati Products (Micromax) had formed a joint venture with Huaqin Technology.
India had imposed restrictions on the foreign direct investments from China following the Galwan valley clashes in 2020. The new norms required approvals from different government departments.
Though the government has not officially relaxed the restrictions, investments under the ECMS scheme from China are not met with higher scrutiny as earlier. Like the investments from other countries, Chinese investments too need only approval from the Ministry of Electronics and Information Technology (MeitY). However, the government is keen on keeping the Chinese counterpart in the partnership a minority stakeholder and on insisting for technology transfer.
The Electronics Component Manufacturing Scheme (ECMS) with a funding of Rs.22,919 crore to make India self-sufficient in electronics supply chain was launched in April This scheme aims to develop a robust component ecosystem by attracting large investments in electronics component manufacturing ecosystem, increasing Domestic Value Addition by developing capacity and capabilities, and integrating Indian companies with Global Value Chains (GVCs).
The scheme aims at attracting investment of Rs.59,350 crore, result in production of Rs.4,56,500 crore and generate additional direct employment of 91,600 persons and many indirect jobs as well during its tenure.
