Lava in talks with China's Huaqin for domestic manufacturing joint venture: Report

Indian mobile phone firm Lava is reportedly in talks with Pudong, Shanghai-based Huaqin Technology Co. to set up a manufacturing joint venture in the country. According to a Bloomberg report, the two companies are in "advanced talks" to set up the venture. If completed, the move would see Lava, along with Huaqin, enter the Indian mobile phone manufacturing market that has already seen other China and Taiwan-based manufacturers set-up facilities in the country.

Lava did not respond to a request for a comment at the time of publishing.

In October 2020, Mint reported that Lava, along with fellow homegrown phone maker Micromax, were among those who were awarded manufacturing contracts by US-based telecom operators. In January last year, Lava said that it planned to raise ₹800 crore to invest in its India manufacturing plans. Following this, in September last year, the company filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for a planned ₹1,500 crore initial public offering (IPO).

However, market regulator Sebi said last month that Lava is among six companies whose IPOs have been held up for much longer than expected, and the body has sought comments from other regulatory authorities for the same.

According to Bloomberg, the partnership with Huaqin may be a move by the company to raise the capital and manpower required to compete against other manufacturers in India. A letter on the joint venture, accessed by Bloomberg, said that the move may generate up to 100,000 jobs, once the formal agreement on the venture is signed.

To be sure, Huaqin is hardly the only China-based manufacturer looking at India as a potential market for expansion — as the US government seeks to stifle technology competition in China in a series of executive orders restraining access to key tech. On September 30, Taiwan-based Pegatron announced an ₹1,100 crore investment in Mahindra World City in Chengalpattu near Chennai in Tamil Nadu, for a mobile phone manufacturing facility.

At the announcement, Pegatron said that the facility will generate 14,000 jobs. Fellow manufacturers Foxconn and Wistron Corp also have facilities to manufacture mobile devices in India.