Huaqin Technology, the leading original design manufacturer (ODM) globally for mobiles, tablets, and laptops, is in advanced discussions with Bhagwati Products Ltd., a domestic contract manufacturer, to form a joint venture aimed at entering the Indian market. “The JV talks have reached advanced level. Which are expected to be finalized after elections”, a person privy to the discussions said. “Senior Huaqin executives currently are in India for the talks and due diligence”.
Huaqin, headquartered in Shanghai, has long been considering an entry into the Indian market through a joint venture, aiming to establish itself as both an original design manufacturer (ODM) and an electronics manufacturing services (EMS) provider. This decision is driven by India's status as one of the fastest-growing mobile markets. According to the International Data Corporation, the smartphone market in India experienced a 1 percent growth, reaching 146 million units in 2023.
The Chinese company held JV discussions with Lava International in 2022 but the plan didn’t materialise for several reasons, including an Enforcement Directorate probe for alleged money laundering. A JV with Huaqin will help Bhagwati secure business from Chinese brands such as Oppo, Vivo, and Realme, which are looking to shift a portion of their manufacturing to India under the production-linked incentive (PLI) scheme.
Bhagwati Products fell short of its PLI targets for mobile handsets in FY24 due to its inability to secure substantial orders from Chinese smartphone manufacturers. The company operates two factories, located in Bhiwadi, Rajasthan, and Hyderabad, Telangana, where it produces mobile phones and TVs. Since 2020, it has also been engaged in manufacturing IT hardware at these facilities. Upon completion of the joint venture agreement, there is potential for expansion into tablet and laptop manufacturing, capitalizing on the growing interest of multinational companies in local production through PLI-approved entities.
Huaqin was the world’s top independent design house/ODM in 2023, with a 27.9 percent market share, followed by Longcheer and Wingtech with 27.3 percent and 20.6 percent, respectively, as per Counterpoint Research’s latest report. To stay competitive in a fiercely contested market, many multinational smartphone companies opt to outsource handset design and manufacturing to IDHs/ODMs. Samsung, Xiaomi, Honor, Oppo and Vivo are among those to have outsourced parts of their portfolios.
According to experts, Wingtech, which collaborates with multiple handset and tablet companies in India, is scaling back its market involvement in the country, creating an opportunity for Huaqin and Longcheer. Padget Electronics, a subsidiary of Dixon Technologies, has entered into an agreement with Longcheer Mobile India to produce and distribute smartphones for major global brands using Longcheer's design and technology. This partnership grants Dixon access to Longcheer's clientele, which encompasses leading Chinese smartphone brands operating in India.