Alphabet, Google’s parent company, will reportedly start manufacturing its flagship Pixel 8 smartphone in India.

Rick Osterloh, senior vice president of Devices and Services, was today (19 October) cited by Reuters as saying that Google will partner with local and international manufacturers to produce the smartphones locally.

“India is a priority market for smartphones, and we’re committed to bringing the best of our hardware and underlying built-in software capabilities to people across the country,” Osterloh is quoted as saying. He offered no details about the location or how many smartphones Google will produce.

In addition, Google partnered with Indian non-bank lender DMI Finance to provide small loans for merchants starting at INR15,000 rupees ($180) via Google Pay.

India is the third-largest recipient of FDI projects globally, accounting for the highest number of inbound software and IT service projects. In September 2023, data published by GlobalData showed that India has become the leading hotspot for foreign investment in data centres.

“India is one of the most recent success stories in FDI, with greenfield investments skyrocketing, particularly in software-related projects,” says Glenn Barklie, chief economist at Investment Monitor. “It also has a large population who use internet services, and the number is growing. The country is second only to China in this regard. Foreign companies are tapping into the huge rise in demand for data centre capacity in the country.”

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Google’s decision to expand smartphone production in India comes after US-based Apple said in April that it would shift its production away from China into other Asian countries, including India. As of April 2023, Apple was making close to 7% of its iPhones in India, up from just 1% in 2021, according to a Bloomberg report.

Overall, the smartphone market in the country is set to surge, Morgan Stanley claims, mostly due to increased digitalisation coupled with a growing consumer class.

“After 20 years of lagging behind its global peers, India’s smartphone market now looks set to reach its potential,” said Erik Woodring, Morgan Stanley’s US hardware analyst. “We expect the market to triple from current levels to reach $90bn by 2032.”