Nokia, the world's biggest mobile phone manufacturer, is to start making handsets in India.
Nokia is battling to get its global market share back above 30%
The company said it was investing in India in order to meet rising demand for its products in the country.
The Finnish firm said it expected to employ up to 2,000 workers and would invest $100m-150m (£52m-78m), along with its suppliers, over four years.
The handset plant will be Nokia's 10th worldwide and its third in Asia after China and South Korea.
Nokia is battling to get its global market share back above 30%, having lost out in the past year to competition from Samsung, LG and Sony Ericsson.
In mid-2003, Nokia had 36% of the market, according to analysts Gartner.