India has approved a manufacturing joint venture between Chinese company Vivo and local manufacturer Dixon Technologies, marking another step in the country's rise as a global smartphone production hub. The 51/49 partnership, with Dixon holding the majority stake, reflects how Chinese brands are increasingly partnering with Indian companies to navigate tighter investment rules.

The approval comes after New Delhi required extra scrutiny of investments from countries sharing a land border, a category that includes China. This move is seen as pivotal for broadening India's role in smartphone manufacturing beyond its current leaders like Apple.

Over the past few years, India has become a major global smartphone manufacturing hub. Apple now accounts for 57% of the country’s smartphone exports by volume, while Chinese brands dominate sales with 72% but contribute less than 10% to exports. This highlights the potential for growth if these brands start exporting from India more extensively.

Local partnerships offer a more stable operating model and align with India's push for greater local participation in electronics manufacturing. For Vivo, this shift towards a majority Indian-owned structure is crucial as it deepens its footprint in India’s second-largest smartphone market. Dixon, the largest electronics manufacturing services company in India, stands to benefit significantly from this venture.