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Xiaomi building phones in India to capitalize on growing market

The budget-friendly Redmi 2 Prime is the Chinese company's first mobile phone made in India, its largest market outside of China.

Xiaomi is looking to win over consumers in India with the new Redmi 2 Prime. Xiaomi

Chinese mobile phone vendor Xioami has a new flagship phone created in and specifically targeted for India.

The new Redmi 2 Prime, touted on Xiaomi's Facebook page, is the company's first mobile phone made in India. Teaming up with China's Foxconn, best known for producing Apple's iPhones and iPads, Xiaomi is aiming to attract more Indian consumers by setting up a manufacturing base in the country. The Redmi 2 Prime is just the first Xiaomi phone to be made in India, according to TechCrunch. Xiaomi will partner with Foxconn to create more handsets in the country.

And why target India specifically? The move is part of Xiaomi's strategy to expand internationally, moving beyond its role as solely a Chinese phone manufacturer. Further, India is the largest market for Xiaomi outside of China, according to Kiranjeet Kaur, senior market analyst for IDC Asia. India is as big as all of Xiaomi's other non-China markets combined together during last year's fourth quarter, Kaur added. But there's significant room for growth.

Xiaomi CEO Lei Jun wants his company to be the top smartphone vendor in India by 2020. That poses a challenge. Samsung currently dominates the nation with a mobile phone market share of 22 percent, while Xiaomi's slice is only 4 percent as the company just started operating in India last year. But the expansion to India is crucial as China's once powerful smartphone market has shows signs of weakness.

"India is in a strong growth phase now while China has started to slow down," Kaur said. "This move is crucial for Xiaomi to keep a competitive edge over others in India, which is expected to grow to 111 million smartphones in 2015 with a 38 percent year-on-year growth. What has been missing for Xiaomi phones outside of China till now was local market customizations, and with the Mi 4i, Xiaomi has indeed shown its commitment on this front."

Now available for sale in India, the budget-friendly Redmi 2 Prime is designed specifically for emerging markets. Available in two flavors, the Redmi 2 with 1 gigabyte of RAM and and 8GB of online storage is priced at 5,999 Indian rupees, or $93. The Redmi 2 Prime with 2GB of RAM and 16GB of storage costs 6,999 rupees, or $110. Both versions are powered by a 1.2-GHz Qualcomm Snapdragon 410 processor, sport a 4.7-inch 1,280x 720-pixel display and are expandable to 32GB of storage with a MicroSD card.

An 8-megapixel camera with 1080p full HD video recording graces the rear, while a 2MP camera with 720p HD video recording faces front. The phone also includes dual SIMs that both support 4G, so users don't have to swap out SIM cards when jumping from one network to another.

Under the covers, the phone uses Google's Android 4.4 software but runs Xiaomi's own MIUI 6.0, a customized skin for Android that adds several features. You can jump from one app to another by tapping and holding on one app and using another finger to flick to another screen. A drop-down notification menu gives you speedy access to key settings. You can also select different themes and switch to an easy mode that gives the interface a simpler look with larger dialpads and icons.

India represents the second manufacturing market for Xiaomi outside of China. The company has already branched out to Brazil where's its making the Redmi 2 for local consumers. As for further expansion, the company will likely continue with emerging markets where customers are more price conscious, and Xiaomi can offer the right types of deals. Hugo Barra, head of Xiaomi's international business, has talked about moving into Vietnam and Thailand but has so far revealed no specific details.