updated - October 1, 2020 Thursday EDT
Chinese phone maker Xiaomi Inc has entered into a partnership with Taiwan's Foxconn Technology Group to open a manufacturing facility in India in a bid to further strengthen its position in one of the leading smart phone markets in the world.
Reuters reported that the factory in Sri City located in the southern state in Andra Pradesh will open on Monday and begin producing Xiaomi's first 'made in India' smartphone named Redmi2 Prime. Bloomberg said the phones are selling online for about $110.
Reuters said the new factory will help Xiaomi move up from its fourth position in the Indian market, where local phone companies are still sourcing products from China and Taiwan due to a dearth in infrastructure and suppliers. Manu Jain, Xiaomi's head in India told Reuters that its presence in the country provides tax benefits as well as operational efficiency with inventory management and product introduction expected to improve. Bloomberg said the move to bolster Xiaomi's Indian presence will also help the company offset slowing demand in China.
Despite entering the market only in July 2014, India has become Xiaomi's second largest market having attracted young consumers to its low-cost but feature-rich phones, Reuters noted. It added that in the second quarter of 2015, Xiaomi was the seventh largest smartphone importer in India, where South Korea's Samsung Electronics Co Ltd and India's Micromax Informatics Ltd are the leaders citing Counterpoint Research data.
Bloomberg, meanwhile, noted that smartphone shipments to India jumped by almost half to 26.5 million units in the second quarter based on a report from International Data Corp. It added that Chinese brands have been aggressively pushing into the Indian market.
Foxconn, which also supplies other large electronics companies, has also been rebuilding its presence in India as Prime Minister Narendra Mondi has pushed to revitalize the country's manufacturing sector to boost the economy and create jobs.
Reuters noted that the Taiwanese company signed on Saturday a deal with the state of Maharashtra to invest $5 billion over the next five years to open a manufacturing and electronics factory there. Foxconn, which is known in India as Hon Hai Precision Industry Co and is the world's largest contract electronics manufacturer, shuttered its operations in India last year after Nokia halted its phone production there.
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