This Is How Xiaomi Will Keep Making Super-Cheap Phones

Chinese smartphone maker Xiaomi announced Monday that it will begin assembling handsets in India as the company charges into the fast-growing market.

Xiaomi, known for its affordable but high-quality headsets, will produce its smartphones in a plant run by Taiwanese contract manufacturing company Foxconn, which agreed to spend $5 billion on research and development in state of Maharashtra, the Wall Street Journal reports.

The agreement is part of Indian Prime Minister Narendra Modi’s “Make in India” initiative, meant to transform India into a global manufacturing hub. Xiaomi, too, will benefit from tax breaks and lower inventory costs, per the Journal.

The Indian market has already proven highly profitable for Xiaomi, whose low-cost smartphones have rapidly sold out in the developing country. Other competitors, like Samsung, have also taken steps to enter the lucrative Indian market.

Read next: Why Xiaomi Terrifies the Rest of the Tech World

PHOTOS: The Rise of Mobile Phones from 1916 to Today

1916 A German field telephone station in the Aisne department of northern France during World War I.

Paul Thompson—FPG/Getty Images

1970 French singer and actor Johnny Hallyday in a scene from the film 'Point de Chute' (aka 'Falling Point').

Keystone/Holton/Getty Images

1980 An early mobile phone during the Iranian Embassy siege at Princes Gate in South Kensington, London.

Kypros/Getty Images

1983 Bob Maxwell, general manager of Englewood-based Mobile Telephone of Colorado, places a call on an FCC-approved radio frequency while driving to work.

Lyn Alweis—Denver Post/Getty Images

1986 THE A-TEAM "The Say U.N.C.L.E. Affair" Episode 5. (l-r) Eddie Velez as Frankie Santana, Robert Vaughn as General Hunt Stockwell, George Peppard as John 'Hannibal' Smith.

Bill Dow—NBC/Getty Images

1992 Democratic presidential nominee Bill Clinton talks on a cell phone while meeting with Boston Mayor Ray Flynn in a New York hotel on Sept. 25.

Mark Lennihan—AP

1993 Whoopi Goldberg during ShoWest in Las Vegas.

Jeff Kravitz—FilmMagic/Getty Images

1997 A farmer with his family sitting on a Bullock Cart and talking on a mobile Phone, in Delhi.

India Today Group/Getty Images

2001 A woman watches smoke pour out of the World Trade Center Towers in New York on September 11.

Nicholas Goldberg—Gamma-Rapho/Getty Images

2011 A rebel militiaman speaks on his mobile phone after capturing territory from government troops on March 25 in Ben Jawat, Libya.

John Moore—Getty Images

2011 A youth films the aftermath of tear gas police fired at protestors in Muhammed Mahmoud Street near Tahrir Square on November 23 in Cairo.

Peter Macdiarmid—Getty Images

2012 Audience members take pictures of President Barack Obama at Florida Atlantic University on April 10 in Boca Raton, Florida.

Marc Serota—Getty Images

2014 A teenager takes a selfie in front of Queen Elizabeth II during a walk around St. Georges Market in Belfast. The Queen has apparently voiced her dismay that when she carries out engagements she is greeted by a sea of mobile phones.

Peter Macdiarmid—PA Wire/Press Association Images/AP

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