China's Xiaomi has partnered with Foxconn, the world's biggest electronics contract manufacturing company, to make smartphones in Andhra Pradesh, the Hindustan Times reported.

The deal came after Taiwan's Foxconn revealed its $5-billion investment for a new facility in Maharashtra, which many consider as the biggest feat so far of the Make in India campaign by Prime Minister Narendra Modi.

Xiaomi, however, did not disclose investment details. It also did not specify the capacity or number of employees to be hired at the unit.

The Chinese company has decided to make its phones here in order to reduce production costs and speed up time to market as it tries to benefit from the country's huge consumer base. India is currently the world's third largest smartphone market, but it will soon surpass the United States to become the second largest by 2017, according to research firm Strategy Analytics.

Foxconn has started manufacturing Xiaomi's first made-in-India phone, Redmi 2 Prime, at their Sri City factory. Hugo Barra, Xiaomi global vice president, launched the Redmi 2 upgrade together with Chandrababu Naidu, chief minister of Andhra Pradesh.

Barra said that the Make in India initiative by the government has helped the company to cut costs, allowing them to operate here with little or zero inventory. He also hopes that one day all Xiaomi phones sold in the country will be made here.

Xiaomi is experiencing a slowdown in China, which is why it is exploring emerging market, like India, to spur growth. The company started doing business here last year. It currently holds a 4 per cent share of the domestic market.

Considered as the world's third largest smartphone maker, Xiaomi has a projected market size of $46 billion.

Last year, Foxconn shut down its factories and left India after Nokia, its biggest client, stopped making phones at its facilities.

By: DocMemory
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