Nihao, India! OnePlus to make phones in Andhra, just like Xiaomi

Two months ago, Xiaomi’s Hugo Barra called it “a huge step forward” when he unveiled the company’s first phone made in India. Today, Pete Lau, founder and CEO of OnePlus, called it “the next big step” as he announced the manufacture of OnePlus phones in India. Both the Chinese phone makers are partnering with Taiwanese company Foxconn to build the phones in the south Indian state of Andhra Pradesh.

But there’s an important difference too. At a press conference in Bangalore today, Pete Lau made it clear that OnePlus is not joining the race with other Chinese phone brands to produce entry-level devices for a population hungry for cheap smartphones – in an obvious reference to the low-end phones that Xiaomi has launched in India. OnePlus will maintain its focus on the middle and premium segments of the market.

See: OnePlus 2 is a flawed but enjoyable sequel – REVIEW

Bracing for India surpassing the US

Those are also segments which may see an acceleration in demand. India is expected to overtake the US in 2017 to become the world’s second largest smartphone market after China.

Foxconn has one production plant ready for OnePlus, which can roll out 500,000 units a month. At the outset, OnePlus will wait and see how demand picks up before ramping up its production in India. Pete Lau said both the OnePlus One and Two will be made in India.

Today, OnePlus sold 15,000 of its Android-powered phones in 12 minutes on Amazon India in a flash sale that was open to anyone. Usually the phone is sold using an invitation system. Today was a special sale to mark the “Make in India” initiative. OnePlus will stick to the invite-only mode for now, with an occasional open sale.

Attempting to out-China China

The Indian government has an ongoing campaign to make India an electronics manufacturing hub, to complement its success in delivering software services for the world. State governments like Andhra Pradesh and Maharashtra are vying with one another to attract manufacturers by easing regulations and making land available. Andhra Pradesh seems to have taken an early lead in this, with its tech-friendly chief minister Chandrababu Naidu expressing a desire to see the growth of an entire ecosystem for making smartphones.

S.A. Sreenivasa Moorthy, CEO of the Andhra Pradesh Electronics and IT Agency, who was at the OnePlus launch event, told Tech in Asia that the makers of smartphones and everything that go into them would be offered five-year tax rebates among other incentives.