Google introduced a new Pixel 4 smartphone.

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Google plans to start manufacturing its Pixel smartphones in India by next quarter, according to a Nicaea Asia report in Thursday.

The US tech giant is looking to diversify its supply chain away from China amid US-China tensions, while also looking to tap into India’s booming smartphone market, the report added.

The change will support Google’s ambitious goal of shipping more than 10 million Pixel phones this year, the report said, citing a person with direct knowledge of the matter.

The report also says that Google will start producing Pixel 8 Pro phones in the April-June quarter, followed by Pixel 8 production around mid-2024.

Google will compete with the smartphone giants An apple and Samsung in India, as well as Chinese brands vivo and Xiaomi.

In 2023, India became the fifth smartphone market to surpass 10 million iPhone sales in a year, making it a key market for Apple, Counterpoint Research said in report on Wednesday.

“For 2023, India’s smartphone market remains stable with total shipments of 148.6 million, a slight decline of 2%,” research firm Canalys said last month.

“Samsung retained the top position in Q4 2023 with a market share of 20% and shipments of 7.6 million units. Xiaomi continued its solid performance, taking second place with 7.2 million units shipped. vivo secured third position with shipments of 7.0 million units,” according to Canalys.

Apple is also shifting production from China to places like India as relations between the US and China remain strained.

Apple CEO Tim Cook last year told CNBC that India represented a “tremendous opportunity” after meeting Indian Prime Minister Narendra Modi at the White House.

India offers incentives to companies to set up manufacturing operations in the country. Dell, HP and Lenovo were among 27 firms that received approval in November to manufacture technology hardware in India under a manufacturing-linked incentive scheme.

Read more about Google’s plans to manufacture Pixel smartphones in India at Nicaea AsiaReport.