Contract manufacturer Compal Electronics is set to establish a smartphone manufacture plant in New Delhi, India, with production to begin soon, DigiTimes reported.

Apparently, the site will assemble semi knock down kits, which are partial units shipped from Compal’s factory in eastern China. Initial capacity will be 500,000 units per month.

But, the report continued, plans to establish smartphone manufacture facilities in Vietnam have been shelved.

DigiTimes noted that as one of the biggest notebook computer makers, Compal is also looking to diversify into new markets including healthcare technology and IoT.

But Compal is not the only contract manufacturer with eyes for India. Rival Foxconn is also investing heavily.

This comes as a number of vendors look to manufacture products in the country, both to address the large market and to avoid taxes on fully-made products imported from elsewhere.