The Times of India reports that Microsoft is closing in on an agreement that will have its smartphones rolling out of Foxconn's factory in Sri City, Andhra Pradesh.

Foxconn, the Taiwanese contract manufacturer, makes phones for top global brands like Apple, as well as the Nokia N1 tablet, and has been revving its plans in India recently. Terry Gou, chairman of Foxconn Technology Group, had recently visited India and made a statement that the company will commit $2 billion to set up 10-12 factories across the country with initial plans for Andhra Pradesh, Maharashtra and Gujarat.

The report claims multiple sources have confirmed that the Foxconn plant will produce two variants of Microsoft smartphones for India. The Indian market has so far been catered to from factories in China, Vietnam, and Finland.

The new facility, named Rising Star, is a rented building formerly in manufacturing hub Sri City, with over 100 employees. The INR 770 million facility is being used to put together smartphones for Xiaomi and another Foxconn client, InFocus.

In India, several smartphone brands, including domestic handset makers, are increasingly focusing on assembling mobile phones locally instead of importing finished goods from China, after India hiked excise duty up to 12.5 per cent to benefit domestic manufacturers in this year's union budget.

Source: The Times of India