Xiaomi's Indian Supplier Dixon To Set Up Factory Near Delhi

Xiaomi's chief supplier, Dixon Technologies India Ltd, will be opening a huge factory on the outskirts of Delhi. The move comes after an Indian government directive that asked Chinese firms to localise everything from manufacturing to the distribution of devices.

Xiaomi was forced to partner with Dixon technologies owing to the Indian government's pressure. Dixon will invest more than Rs 400 crore ($48.2 million) over three years in the factory, according to Bloomberg.

The manufacturing plant will largely produce Xiaomi smartphones. It will be spread over more than 300,000 square feet or the size of six football fields. It will be inaugurated by a government official by the end of September.

Xiaomi also gave a contract to India’s Optiemus Electronics Ltd. to make its Bluetooth neckband earphones, a product it had been importing from China. This partnership with Xiaomi is another boost for the Indian firm Dixon, which is one of the companies vying to become India’s response to Foxconn — the Taiwanese supplier most famous as the key manufacturer of Apple's iPhones.

Dixon produces goods for companies like Motorola and Samsung, including cellphones, washing machines, and televisions. It is one of India's biggest manufacturing service firm.

Xiaomi, previously the market leader in India for smartphones, lost ground as a result of increased regulatory scrutiny and an overabundance of product offerings. The Chinese company is hoping for a slow recovery as it seeks to provide domestically produced 5G smartphones at competitive prices.

Earlier in February 2020, Dixon chairman Sunil Vachani had sold shares worth Rs 79.7 crore, reducing his stake in the company from 36.27 per cent to 34.67 per cent. Another promoter, Geeta Vaswani, had also sold shares worth Rs 94 lakhs in February along with key management personnel, who had disposed shares amounting to Rs 5.5 crore.