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. In a press statement Thursday, RIL said the move backs the government’s “Make in India” initiative. Trade analysts are optimistic that the move will create huge jobs opportunities.
Mukesh Ambani-owned Reliance will invest Rs 1,670 crore in Sanmina’s existing Indian entity and own 50.1 percent equity stake in the enterprise while Sanmina will own the rest.
“The joint venture will create a world-class electronic manufacturing hub in India, in line with the “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 venture will also manufacture goods across industries such cloud infrastructure, medical and healthcare systems, and defence and aerospace.
The announcement comes with 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. 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.
