India’s electronics industry surges as strategic partnerships with China deepen

Indian electronic manufacturers are seeing measurable benefits as ties with China continue to strengthen in 2025. The electronics industry in India relies heavily on Chinese imports for intermediate goods, including printed circuit boards, flat panel displays, and critical components like rare earths used in electric vehicles and consumer electronics. Signs of warming relations include newly approved joint ventures, such as those between Dixon Technologies and Longcheer, and government flexibility permitting up to 24–26% Chinese stake in Indian electronics companies.

Several top executives and senior managers from major Indian firms—including Micromax-owned Bhagwati Products, and PG Electroplast—are set to visit China to advance new business partnerships. This reflects renewed momentum among electronics manufacturers who are optimistic about expanding India-based ventures with Chinese technology and support.

Meanwhile, Chinese technology investors who previously faced regulatory restrictions have begun re-engaging with Indian companies. These investors are now revisiting opportunities and initiating discussions, anticipating that entry approvals may proceed more quickly as bilateral relations improve.

After a period of diplomatic friction, business visas for Chinese professionals and direct flights between India and China are resuming, signaling fresh economic cooperation.

China remains the dominant supplier for many of India’s strategic manufacturing sectors, accounting for more than 60% of global electronics manufacturing and over half of India’s component needs. Efforts by Indian companies to localize manufacturing have been hampered by the lack of domestic alternatives for many key parts. Meanwhile, Chinese firms benefit from renewed access to the Indian market, as local consumption in China slows. The Indian government continues to encourage investment and technology transfers, aiming for self-reliance while maintaining crucial supply chain partnerships with Chinese manufacturers.

The collaboration is sensitive, driven by affordable availability from Chinese suppliers and the strategic need to reduce dependence over time. Factors such as the relaxing of rare earth export restrictions and increasing merchandise exports help Indian manufacturers offset disruptions caused by US tariffs or past border disputes. Notwithstanding, India’s supply chain vulnerability remains—any reversal of current policies or trade restrictions from Beijing could disrupt domestic growth. Both nations are cautiously balancing their economic interests, and improved engagement is expected to offer India both immediate and long-term opportunities in electronics manufacturing.

CT Bureau