Voltas Fails to Revive JV with China’s Highly; Tech Alliances Gain Ground

A recent attempt to restart a joint venture with China’s Highly Group for an air-conditioner compressor plant in India has failed. Instead of agreeing to an equity partnership, Highly proposed a technical collaboration. The Chinese firm cited India’s slow approval process and rising geopolitical tensions as key risks. 

This is a shift from two years ago, when Highly had rejected a similar tech-only proposal from Voltas. At that time, Highly was looking for a 60% stake in the joint venture, but the deal was blocked due to India’s Press Note 3 norms, which require strict approvals for investments from neighbouring countries, including China. 

Focus Shifts to Technology Sharing 

Now, Highly and other Chinese companies are showing more interest in non-equity partnerships. A technical alliance gives Indian firms access to advanced technology, while Chinese companies get guaranteed production volumes. For example, Highly has tied up with PG Electroplast, a Noida-based electronics contract manufacturer, to make compressors. 

PG Electroplast recently confirmed it is building a ₹350-crore compressor plant near Pune with a capacity of 5 million units per year. 

Indian Firms Still Seek Chinese Expertise 

Despite political challenges, many Indian firms like Dixon Technologies, Epack Durable, and Bhagwati Products are in talks with Chinese companies for technology support under the government’s ₹23,000-crore electronics component manufacturing scheme. 

Industry leaders say that while India no longer needs Chinese capital, access to their technology is crucial. Some Chinese firms are open to taking a small 20–30% stake in joint ventures or going ahead with just technical collaborations. 

Geopolitical Backdrop 

India-China business ties remain tense, especially after recent military issues involving Pakistan and China’s support for it. This has made full-scale joint ventures harder to execute, even though China still supplies 70–75% of India’s electronics components. 

Read more: Hindustan Zinc Shares Slide Over 5% Following Block Deal Announcement by Parent Vedanta 

Conclusion 

While full equity partnerships with Chinese firms are difficult under current conditions, Indian companies are still moving forward through technical alliances. These partnerships could help strengthen India’s electronics manufacturing sector without relying heavily on foreign ownership. 
 
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