NEW DELHI : Noida-headquartered contract manufacturing firm, Dixon Technologies (India) Ltd, is in the process of inaugurating the setting up of a 1 million square-foot assembly facility for Chinese electronics brand Xiaomi, two people with knowledge of the matter told Mint.
This will be one of two such new facilities by Dixon, the second of which is expected in one of the southern Indian states—and could cater to demand from other brands and product categories.
“The new facility is coming up in Noida, and the company will be looking to produce up to 1 million smartphones per month from its new facility, once it is completed,” one of the officials said on condition of anonymity since the matter was not disclosed in public yet.
Bloomberg reported on Friday that Dixon is investing up to ₹400 crore over three years in the facility, which is likely to be inaugurated by the end of the year.
Dixon and Xiaomi declined to comment.
To be sure, on 31 May, Rajeev Chandrasekhar, Union minister of state (MoS) for electronics and IT, said Dixon had struck a deal with Xiaomi to assemble and export the latter’s phones.
Xiaomi also signed a local manufacturing deal for its wireless neckband earphones in the audio product category with homegrown contract manufacturer Optiemus Infracom Ltd in May this year.
Dixon is also one of the applicants for the Centre’s revised production-linked incentive (PLI) scheme for IT hardware, a second official said, adding that the manufacturer is already in talks with multiple laptop brands in India to strike assembly deals.
Such deals are expected to expand further, as the Centre looks to push for more local manufacturing across all electronics categories. On 3 August, the Directorate General of Foreign Trade (DGFT) notified incoming restrictions on laptop imports, pushing laptop brands towards more such local manufacturing and assembly deals.
While the Centre has since clarified clauses around licence issuance and imports in the sector, giving time until 31 October for brands such as Apple, Dell and HP, among others, to procure a licence for more imports, the move left the likes of Dixon, Bhagwati Products Ltd and Flextronics International Ltd in a favourable position to procure more deals.
Dixon’s new Noida plant, however, is tipped to cater specifically to smartphones. The latter has also become increasingly sought after, even though India’s local manufacturing efforts continue to remain assembly lines and not pure-play manufacturing. A key reason for this is because a number of key components, such as processor and display chips, are still manufactured outside of India—which the Centre is trying to alter through various incentive schemes.
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Updated: 16 Sep 2023, 12:16 AM IST