Chinese smartphone giant Vivo's plans to sell a majority stake in its Indian operations to the Tata group have hit a roadblock. The discussions between Vivo and Tata reportedly fell apart due to objections from Apple, Tata's key partner in manufacturing.
Vivo aimed to 'Indianize' its operations to align better with local regulations and scrutiny. The company intended to transfer a 51% stake in its Indian arm to Tata, but the deal faced complications when Apple, which partners with Tata for its manufacturing operations in India, raised concerns.
Apple and Tata are collaborating on manufacturing Apple devices at a Wistron plant in Bengaluru. For Apple, any partnership between Tata and Vivo would mean working with a competitor, which might have led to the breakdown in talks between Tata and Vivo.
Despite the development, Tata has denied that negotiations have fallen through. The Indian government has been increasing pressure on Chinese smartphone makers to partner with local entities. This strategy aims to facilitate easier fund access and integrate these companies into India's Make-in-India initiative, which offers benefits such as visa access and regulatory protection.
Several Chinese companies have already adopted this approach. For example, the SAIC group, owner of MG Motor, sold a majority stake to JSW Group, while Transsion Technology's Indian subsidiary Ismartu India transferred a 56% stake to Dixon Electronics led by Sunil Vachani.
As Tata continues to expand its manufacturing capabilities and its recent acquisition of Apple’s contract, the Vivo deal could have disrupted the crucial partnership between Tata and Apple. Tata is positioning itself to compete with global manufacturing giants like Foxconn, Pegatron, and Wistron in the global smartphone market.
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