India on Thursday gave the green light to a manufacturing joint venture between China’s Vivo and local manufacturer Dixon Technologies, marking what could be the next phase of the country’s smartphone manufacturing boom - after Apple did all the heavy lifting to turn India into a global production hub.

The approval, which unblocks a partnership first announced in December 2024, comes under investment rules introduced in 2020 that require extra scrutiny for investments from countries sharing a land border with India - a category that includes China. The joint venture will acquire some of Vivo’s manufacturing assets, produce part of its smartphone orders, and maybe even make stuff for other brands, according to a stock exchange filing by Noida-based Dixon.

The venture is structured as 51/49 - Dixon holds the majority, Vivo gets the rest - reflecting a broader trend of Chinese smartphone brands cozying up to local partners to navigate India’s regulatory landscape. Analysts think this structure could become the industry template, broadening India’s smartphone manufacturing story beyond just Apple.

Apple, which spent years building its Indian footprint, now accounts for 57% of the country’s smartphone exports by volume, per Counterpoint Research. Chinese brands, meanwhile, dominate domestic sales with 72% of the market but contribute less than 10% of exports - a gap that suggests there’s plenty of room to grow if they start exporting like Apple does.

Chinese brands have faced tax probes and regulatory headaches in India since the 2020 border clashes, which explains why handing majority control to an Indian partner suddenly looks like the sensible thing. “The approval creates a win-win for both players,” said Tarun Pathak, research director at Counterpoint Research, noting that Vivo gets policy alignment while Dixon gets scale.

Vivo, which already makes and exports phones from India, held a 23% shipment share in Q1, per Counterpoint. For Dixon, the venture could add annualized manufacturing volumes of about 20 million to 22 million smartphones, based on Vivo’s current sales, according to comments by Managing Director Atul Lall. That’s a nice bump for a company that already makes phones for Xiaomi and is positioning itself as a reliable bet in India’s electronics build-out.