An inter-ministerial panel has approved a collaborative venture between Bhagwati Products Ltd, a domestic contract manufacturer, and Huaqin Technology, a leading Chinese original design manufacturer (ODM). This approval marks a significant step forward for Huaqin Technology, which will be investing in the joint venture and acquiring a minority ownership stake.
Rajesh Agarwal, a director at Bhagwati Products, confirmed this development, stating that the finalization of the joint venture is expected to occur within the next month. Huaqin Technology, headquartered in Shanghai and recognized as the largest global design manufacturer of mobile phones, tablets, and laptops, has been seeking to enter the Indian market, one of the fastest-growing regions for mobile technology.
The company had previously engaged in discussions with Lava International in 2022 regarding a similar venture. However, those discussions were derailed by various issues, including an investigation by the Enforcement Directorate concerning alleged money laundering.
The new joint venture with Huaqin is anticipated to provide Bhagwati Products with an opportunity to secure business from Vivo, India’s second-largest smartphone brand. Vivo is currently looking to shift some of its manufacturing operations to India as part of the production-linked incentive (PLI) scheme.
Bhagwati Products plans to leverage its PLI approval to offer the benefits received from the government to Vivo, sources have revealed. The joint venture may also explore opportunities in tablet and laptop manufacturing, as many multinational companies are keen to establish local production through PLI-approved entities.
Bhagwati Products has recently taken over Vivo’s manufacturing facility in Greater Noida, which was previously operated by Micromax. The company has begun the hiring process and is preparing to commence smartphone production for Vivo through its new ODM joint venture with Huaqin. The factory, located at World Trade Center, Techzone IT Park, was on lease but has now been transferred to Bhagwati Products.
Vivo has moved its manufacturing operations to a new 170-acre facility in Greater Noida, which is set to become fully operational in the near future. In a competitive market where multinational smartphone companies frequently outsource handset design and manufacturing to independent design houses (IDHs) and ODMs, this joint venture aligns Bhagwati Products with a significant trend.
Companies like Samsung, Xiaomi, Honor, Oppo, and Vivo have been outsourcing portions of their production globally. This trend is gaining momentum in India, with companies increasingly partnering with ODMs and electronics manufacturing services (EMS) providers to produce smartphones domestically.
Bhagwati Products benefits from the PLI schemes that support the manufacturing of smartphones, IT hardware, and air-conditioner components. Despite this, the company missed its PLI targets for mobile handsets in FY24 due to its inability to secure substantial orders from Chinese smartphone manufacturers.
The company operates two production units, located in Bhiwadi, Rajasthan, and Hyderabad, Telangana, where it manufactures mobile phones and television sets. Additionally, it has been producing IT hardware at these facilities since 2020.
According to the latest report from Counterpoint Research, Huaqin Technology emerged as the top independent design house/ODM in 2023, capturing a 27.9 percent market share. It was followed by Longcheer and Wingtech, which held market shares of 27.3 percent and 20.6 percent, respectively.
Bhagwati Products Ltd is a prominent Indian contract manufacturer specializing in mobile phones, IT hardware, and television sets. Operating from its facilities in Bhiwadi and Hyderabad, Bhagwati leverages government incentives like the Production-Linked Incentive (PLI) scheme to enhance its manufacturing capabilities. The company recently expanded its operations through a strategic joint venture with Huaqin Technology, focusing on mobile devices and potentially exploring tablet and laptop production.
Huaqin Technology, based in Shanghai, is a global leader in original design manufacturing (ODM) for mobile phones, tablets, and laptops. With a significant market share as the world’s largest ODM, Huaqin is expanding into India through its joint venture with Bhagwati, aiming to tap into one of the fastest-growing mobile markets.
