China’s Xiaomi Inc has tied up with Taiwan’s Foxconn to start assembling phones in India. The Indian market, which Xiaomi entered in July last year, has fast become its second-largest market as the company’s low-priced, feature-rich phones find favour with young and cost-conscious customers. Recently in a separate announcement, Foxconn is going to invest $5 billion in an electronics manufacturing facility at Maharashtra.

Apart from the tax benefits of making in India, the facility will help Xiaomi better manage inventory and reduce lead times from three to four weeks to under two weeks. The assembly line marks a return for Foxconn, officially known as Hon Hai Precision Industry Co, to the Indian market.

Chinese smartphone maker Xiaomi has announced its first manufacturing unit in India in Sri City, Andhra Pradesh. The company also launched its first ‘Made in India”smartphone called Redmi 2 Prime at a price of Rs 6,999.