Threat Of Import Restrictions Working? HP India In Discussion With VVDN, Dixon Technologies To Assemble Laptops In Country

Is the fear of import restrictions really driving HP India's latest moves? It seems so. According to reports, HP India is currently in discussions with VVDN Technologies and Dixon Technologies to assemble its laptops in the country.

This comes as the Indian arm of the American laptop maker is among the 27 companies eligible for the PLI scheme 2.0 for IT hardware, which offers incentives totalling Rs 17,000 crore.

In August 2023, the union government imposed import curbs on laptops, tablets, and certain types of computers, citing 'security reasons' and the need to promote domestic manufacturing. However, a few weeks later, it rolled back the decision.

Although HP India already has its assembly plant and a partnership with Flex for laptop assembly, it appears to be seeking assembly-only deals with Dixon and VVDN. Under this arrangement, HP India would provide all the components for manufacturing, a process known as jobwork.

Both VVDN Technologies and Dixon Technologies are already working with Intel, receiving key technological insights to bolster the laptop manufacturing industry in India. Other collaborators with Intel include Kaynes Technology, Syrma SGS, and Optimeius.

VVDN has partnered with Hewlett Packard Enterprise (HPE) to assemble servers for the US company at its Manesar plant in Haryana, with the factory expected to produce high-end servers valued at $1 billion over the next five years.

Dixon, one of India's largest homegrown electronics manufacturing services (EMS) players, secured a contract in December 2023 to assemble laptops and notebooks for Lenovo in India. It also assembles Motorola feature phones for HMD India. In 2021, Dixon entered into a partnership to assemble Acer laptops in India.

To meet the demand, Dixon is investing Rs 250 crore to set up a plant in Noida with the capacity to produce 1 million laptops per annum, expected to be operational soon.

In India, HP India is the largest PC player across all segments, holding a 31.5 per cent market share in 2023, according to IDC Research. It is followed by Lenovo at 16.7 per cent, Dell at 15.5 per cent, and Acer at 12.3 per cent. In the laptop segment alone, HP leads with a 33.2 per cent share, followed by Dell at 23.1 per cent and Lenovo at 14.7 per cent, according to Statista.

The Indian laptop market was valued at close to $8 billion in 2023, with 65 per cent of the units being imported, according to Counterpoint Research. The reworked PLI scheme aims to significantly reduce these imports and promote domestic manufacturing.