Reliance Industries Limited’s subsidiary Reliance Strategic Business Ventures Limited and US-based manufacturing firm Sanmina Corporation have entered an agreement to create a manufacturing joint-venture to make electronics in the country, the companies said Thursday, backing the government’s ‘Make in India’ initiative. Mukesh Ambani-owned Reliance will invest Rs 1,670 crore in Sanmina’s existing Indian entity and own 50.1% equity stake in the JV while Sanmina will own the rest, the companies added. RIL’s shares were down about 0.15% in early trade at Rs 2394.90 per share.
“The joint venture will create a world-class electronic manufacturing hub in India, in line with the Hon’ble Prime Minister’s “Make in India” vision,” Reliance said in the statement. All the manufacturing will take place in Sanima’s Chennai factory, and will aim to expand sites across India. The companies will manufacture electronics hardware with a priority on high technology infrastructure hardware, according to the statement. The JV will also manufacture goods across industries such cloud infrastructure, medical and healthcare systems, and defense and aerospace.
The announcement of a new JV comes at the backdrop of Narendra Modi government’s flagship PLI (Production-Linked incentive) scheme encouraging domestic as well as foreign companies to manufacture in India by offering incentives. Electronics manufacturing, one of the 14 listed industries under the PLI scheme, forms a substantial chunk.
In February, the government said it expects investment of Rs 34,090 crore under the PLI scheme for large-scale electronics manufacturing by 2025. Reliance was listed as one of the beneficiaries in the government’s PLI scheme for solar panel manufacturing. RIL’s unit Reliance New Energy Solar is expected to get PLI benefits worth Rs 1,190 crore.
“For both growth and security, it is essential for India to be more self-reliant in electronics manufacturing in Telecom, IT, Data Centers, Cloud, 5G, New Energy and other industries as we chart our path in the new digital economy. Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand,” Akash Ambani, Director, Reliance Jio, said in the statement.
Reliance has been on a buying spree to boost its manufacturing capabilities with a focus on clean energy and technology. Earlier this year the company bought UK-based sodium ion battery technology provider Faradion for 100 million pounds. In domestic markets, Reliance acquired an additional stake in Sterling & Wilson Renewable Energy earlier this year. While Nasdaq-listed Sanmina, an electronics manufacturing services company, expects to significantly grow the scale of this business over time and expand its Indian manufacturing footprint through the deal.