In another major boost to Prime Minister Narendra Modi’s ambitious Make in India programme, China’s Xiaomi on Monday announced a tie-up with iPhone maker Foxconn to make smartphones in Andhra Pradesh.
The deal, which will make India Xiaomi’s second local manufacturing hub outside China after Brazil, comes within days of Taiwan’s Foxconn announcing a $5-billion (Rs 31,935-crore) investment for a plant in Maharashtra.
Making phones here will help the Chinese firm cut costs and shorten delivery time as it looks to grab a bigger slice of the world’s third-largest smartphone market.
The new factory at Sri City began rolling out the company’s first made-in-India phone, Redmi2 Prime, on Monday. It was launched in Visakhapatnam by Hugo Barra, global vice-president, Xiaomi, along with Andhra Pradesh chief minister Chandrababu Naidu. Priced at Rs 6,999 for a 2GB model, the Redmi2 Prime is an India-specific upgrade of Xiaomi’s bestseller Redmi 2.
Xiaomi did not to give details about the investment, capacity or number of employees at the unit.
“The Make in India programme allows us to cut costs. We can operate here either with little or zero inventory. Over time, every Xiaomi phone sold in India will be made in India,” Barra said.
Faced with a slowdown in China, Xiaomi is betting on emerging markets, including India, to fuel growth.
“This partnership will develop an electronics manufacturing ecosystem of global standards in Andhra Pradesh,” Naidu said.
The assembly line also marks a return to India for Foxconn, which was forced to shut up shop last year after client Nokia stopped making phones at its plant.
Xiaomi, which entered India in 2014, commands a 4% share of the domestic market.
The world’s third-largest smartphone maker is also the most valuable tech startup with an estimated market size of $46 billion.