As tensions wind down, Sino-Indian tieups put buzziness back in business

Indian and Chinese companies have stepped up talks on joint ventures and other partnerships in sectors such as electronics and automobiles after the recent meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping. Both pledged to improve ties, continuing the thaw that has set in against the backdrop of US tariffs.

Chinese refrigerator and washing machine major Haier’s bid to sell a stake in its wholly owned Indian subsidiary has gained “tremendous pace” in the last two days after negotiations with potential buyer and industrialist Sunil Mittal slowed for two months due to multiple issues, an industry executive said.

Positive Sentiment on Both Sides

The leadership of both parties and merchant bankers had multiple rounds of meetings on Monday and Tuesday.


Haier wants to sell 49% in the Indian arm, while holding on to 49% and offering the remaining 2% to employees, the executive said.

India’s largest electronic contract manufacturer Dixon Technologies is soon going to file its Press Note 3 application for a joint venture with China-based Chongqing Yuhai to make precision components such as laptop enclosures. It also expects early approval of two pending applications, joint ventures with HKC and Vivo, a senior executive said.

The auto sector expects the ball to roll now on the import of heavy rare earth magnets that had hit electric vehicle manufacturers, especially two-wheeler companies like Bajaj Auto. “There is expectation things will move after the PM visit," said an executive from the auto component industry referring to the import restrictions on heavy rare earth magnets from China since April.

Several chief executives and senior managements of large Indian firms such as Dixon, Micromax-owned Bhagwati Products and PG Electroplast are soon going to fly to China to finalise more deals.

“The mood is very upbeat right now in Chinese companies as far as India is concerned,” said Rajesh Agarwal, director at Bhagwati Products, one of the leading Indian electronic contract manufacturers. “There were positive signals last couple of months, but the extremely cordial meeting between the leadership of the countries will accelerate things. We will now freeze the JVs with Chinese component manufacturers.”

Ashok Leyland managing director Shenu Agarwal and parent Hinduja Group’s president Shom Hinduja were in China on Monday to sign a deal. Ashok Leyland began a long-term exclusive partnership with Chinese battery technology company CALB Group to develop and manufacture next-generation batteries for automotive and non-automotive applications.

Aalok Shah, head of global advisory for India at Rothschild & Co, said electronics manufacturers are optimistic about India ventures. “I have also heard Chinese technology investors, who could not invest for the longest time, have started revisiting and initiating conversations. They are now expecting to get entry approvals faster," he said.