Hyderabad, Aug. 10: China's Xiaomi has tied up with Taiwan-based Foxconn to assemble smartphones in the country as it looks to grab a larger share of the booming market.

The tie-up, which will make India Xiaomi's second local manufacturing hub outside China, comes within days of Foxconn announcing an investment of $5 billion for a plant in Maharashtra.

The new factory at Sri City in Andhra Pradesh today began rolling out Xiaomi's Redmi2 Prime, priced at Rs 6,999 for a 2GB model.

Making phones here will help the Chinese company cut cost and shorten delivery time. Xiaomi, the world's fourth-largest phone vendor, will gradually roll out other devices from this facility.

The company, which started operations in India last year, also manufactures devices in Brazil.

"We are starting small, but our eventual aim is to make most of our devices if not all of our devices that are sold in India, here," Xiaomi's India head Manu Jain said.

Foxconn, a contract manufacturer for the world's largest electronics brands including Apple Inc, last week announced $5-billion investment in Maharashtra over the next five years and is looking at having factories in several parts of the country.

The Redmi 2 Prime will go on sale across online platforms such as Flipkart, Snapdeal and Amazon from today, Xiaomi vice-president Hugo Barra told reporters here. The device is an enhanced version of Xiaomi's bestseller Redmi 2 and features 2GB RAM and 16GB memory.

At the launch, Andhra Pradesh chief minister N. Chandrababu Naidu said, "The Prime Minister and even we are keen on manufacturing in India. We can become a hardware manufacturing hub to not only meet our own demand but also of the world. We have a huge potential. We have 10 million tech graduates and entrepreneurs."