Shares of Dixon Technologies are expected to remain in focus after a Reuters report revealed that NITI Aayog has proposed relaxing investment rules for Chinese companies, a move that could significantly benefit Indian manufacturers with potential Chinese partnerships, such as Dixon.
According to three government sources cited by Reuters, the proposal would allow Chinese firms to hold up to a 24% stake in Indian companies without requiring security clearance from India’s home and foreign ministries. Currently, all investments from Chinese entities require approvals, a process that has slowed or shelved several high-profile deals since being introduced in 2020 after India-China border tensions.
The proposal is part of NITI Aayog’s recommendations to boost foreign direct investment (FDI) into India and is reportedly being reviewed by the trade ministry, finance ministry, foreign ministry, and the Prime Minister’s office. However, a final decision could still take months and will ultimately rest with political leadership.
For Dixon and other Indian electronics manufacturers, easing of these rules could mean faster access to capital, technology partnerships, and increased competitiveness, especially as they expand production to meet growing domestic and export demand.
In recent years, stringent rules have impacted investments like BYD’s $1 billion electric car JV and contributed to India’s FDI plunging to a record low of just $353 million last year, compared to nearly $44 billion in FY21.
The move comes amid efforts to improve bilateral ties between India and China following military de-escalation and diplomatic engagement, including India’s Foreign Minister visiting Beijing this week after five years.
While the industries department reportedly supports easing the rules, other government bodies are yet to finalize their stance. The proposed change could also include revamping the board that decides on FDI proposals, Reuters reported.
If implemented, the proposal could unlock significant opportunities for companies like Dixon Technologies, which already partners with global brands and stands to gain from easier Chinese investment.
Disclaimer: The statements, information, and quotes in this article are entirely based on the Reuters report and government sources cited therein. Business Upturn or the author is not liable for the accuracy or interpretation of this information.
