Foxconn will invest $500 million to set up manufacturing plants in the southern Indian state of Telangana, the latest in a series of bets from the key Apple contract partner as it expands its base in the South Asian market.

K.T. Rama Rao, Telangana’s IT minister, said in a tweet that the investment from Foxconn will create 25,000 direct jobs in the “first phase.” Foxconn, which already manufacturers iPhones in India, won a bid to manufacture the AirPods in the country earlier this year, Reuters reported. It also bought land worth $37 million in Bengaluru earlier this month, according to local media reports.

India’s Prime Minister Narendra Modi’s financial incentives in recent years to drive local manufacturing have attracted commitments from Foxconn, Wistron and Pegatron.

Foxconn entered India in 2006, years ahead of many of its global rivals. “During this time period, we have accumulated much experience in managing local employees, supply chain and logistics, which are all important competitive advantages that have allowed us to move at a pace that is faster than the market. It has also allowed us to expand quickly. Apart from continuing this momentum, we will also be increasing production yield locally,” Foxconn chairman Young Liu said on a recent earnings call.

“India has now reached a population of 1.4 billion people, translating to a large potential market for mid-to-high-end products which our clients are focusing on. Hence, it is necessary for us to continue to expand assembly and component operations in India. We see that more and more suppliers are investing in establishing plants in India and believe that this will become more prominent as time goes on. As for labor costs, India also has its advantages. Hon Hai will also continue to apply for government incentives, to increase its competitiveness.”

The growing interest from Apple’s manufacturing partners also comes at a time when the iPhone-maker is attempting to expand its manufacturing infrastructure beyond China.

Apple, which opened its first two retail stores in India last month, could expand its iPhone manufacturing capacity in India to produce 25% of all iPhones by 2025, according to JP Morgan analysts.

Jagmeet Singh contributed to this report. 

Apple partner Foxconn to invest $500 million in India’s Telangana by Manish Singh originally published on TechCrunch