Smartphone makers looking to India

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Lenovo Group has set up a smartphone assembly unit in India, amid claims that India is set to replace China as the ‘factory of the world’.

CNBC reports that Lenovo has formed a partnership with contract manufacturer Flex and established a facility in the southern Indian city of Chennai.

The plant has already started to put together MotoE range of smartphones from imported parts. it will eventually have an annual production capacity of 6 million smartphones and employ 1,500 people.

The decision follows news earlier this month that China's phone maker Xiaomi and Taiwan's Foxconn would assemble phones in the state of Maharashtra.

According to an article in the Global Times, Lenovo’s investment is the most significant Chinese investment in India since the launch of Indian Prime Minister Narendra Modi's ‘Make in India’ campaign and suggests India could become the new ‘factory of the world’. Until now, that nickname has applied to China.

"Recent years have seen an increasing number of discussions about the relationship between China and India, raising questions about whether it is a complementary or a competitive one,” the article said.

It added – "The real challenge facing both countries is how to turn away from rivalry and focus on their ability to engage in economic transformation via cooperation rather than competition.”