China's Xiaomi To Partner With Indian Dixon Tech To Make Smartphones In India(Image: @MiIndiaSupport)

Xiaomi’s supplier, Dixon Technologies India, is all set to invest in a huge factory on the outskirts of Delhi as the government wants the Chinese company to engage local, Indian supply partners. The factory which would use up a space of more 300,000 square feet would be a major producer for Xiaomi smartphones. Beijing based Xiaomi’s earlier suppliers were Foxconn and DBG Technology.

Dixon would be pumping more than Rs. 4 billion, that is $ 48.2 million, over a time period of three years into the factory. The company is also said to be inaugurating the factory by an official by the last of this month, the ET reported from a source which chose to remain unidentified.

The partnering with Dixon Technologies comes in with the Indian government pushing on Chinese companies to localise every aspect including manufacturing and device distribution. With this move in progress, the earlier suppliers of Xiaomi, Bharat FIH and China’s DBG Technology Co. could lose business. Earlier this year, Xiaomi had partnered a contract with Optiemus Electronics Ltd., to produce its Bluetooth neckband and earphones which was imported from China earlier.

India, the most populous country, is the world’s second biggest smart phone market, which also hosts a competition on this. Earlier, Xiaomi had unrivalled space in the Indian smartphone market, but later, it reduced, due to regulatory scrutiny and over expansion of its own products, which Xiaomi has admitted that it confused customers.

This is expected to be a boost to Dixon and Indian markets. Three decades earlier, Sunil Vachani, began with money which was borrowed, in a shed which was rented, outside Delhi. His electronics company, Dixon is expanding, producing smartphones, washing machines and TV sets for Motorola and Samsung. Both the companies, Xiaomi and Dixon has not comment on the recent developments, the ET said.