On June 17, media reports indicated that under the Indian government's localization requirements, the Chinese-owned Vivo India subsidiary is negotiating with Tata Group to acquire a majority stake, with negotiations in the final stages.

According to insiders, the discussions have entered the late stages, focusing on the valuation of Vivo India. Vivo seeks a higher valuation, but Tata Group has not finalized its offer.

Reports suggest that under Indian requirements, local companies must hold at least 51% of shares in potential joint ventures with Chinese mobile companies. Additionally, India wants local joint ventures to have leadership and distribution within the country.

In this context, Chinese companies have faced numerous challenges in India in recent years. Since 2022, Vivo's operations in India have undergone rigorous local legal scrutiny, with other Chinese smartphone manufacturers like Xiaomi and OPPO also facing warnings from laws such as the Foreign Exchange Management Act and the Prevention of Money Laundering Act. In June 2023, after six years of struggling in India, Xiaomi was fined 4.8 billion RMB for allegedly illegally transferring funds to foreign entities.

Throughout 2023, India has continued to tighten regulations on major Chinese phone manufacturers. India not only promotes local companies' participation in Chinese enterprises' operations (including manufacturing and distribution), but authorities also require Chinese companies operating in India to appoint Indian executives. These actions are seen as part of India's efforts to support local businesses and promote the "Make in India" strategy. However, for Chinese brands like Vivo, this poses a significant challenge.

Amid India's "division" trend, Tata is not the only Indian company eyeing Vivo. Reports indicate that Vivo's manufacturing plant in Greater Noida has been transferred to the Indian company Bhagwati Products (Micromax). This local communications device assembly company has started urgently recruiting employees after "taking over" Vivo and is expected to soon produce Vivo smartphones.

Analysts believe that despite India's eagerness to dilute Chinese companies, China remains crucial to India. India's current foreign investment situation is not optimistic, with last year being even more severe. In 2023, the amount of direct foreign investment attracted by India has fallen to its lowest point since the 2008 financial crisis. Apart from the influence of Apple, India's attraction to multinational companies has been limited.

According to an executive from a leading Indian phone manufacturer, due to the economies of scale and advanced technology of Chinese companies, they can accelerate the establishment of local supply chains in India. The report emphasizes that developing local businesses takes considerable time, and without the participation of Chinese companies, building a domestic supply chain would be costly.