Cupertino-based Apple is expanding operations in India and will begin manufacturing iPhones in Bangalore starting April. An agreement between Apple and Indian state of Karnataka was forged so that the American tech giant can setup its facility in the industrial hub of Peenya, Bangalore.

According to the Indian government, Apple's decision to outsource its iPhone manufacturing has cemented the reputation of India for being one of most preferred offshore destination. State policies are also investor-friendly, making Bangalore a hub to foster innovation, investment and manufacturing.

Apple setting up a facility in Bangalore is considered as a done deal between the tech giant and Indian government. Apple representative and iPhone operations president Priya Balasubramaniam already inked the agreement with several ministers and state delegates including the head of government affairs Ali Khanafer.

According to Live Mint, Apple was drawn into the manufacturing initiative of Bangalore because of dynamic investment climate and availability of skilled manpower. The incentives behind the move wasn't discussed yet, but Apple confirmed that they are targeting domestic market.

Currently, Apple has an Asian facility in Taiwan through a partnership with Wistron Corporation. It is unclear though if the company tends to transfer the facility altogether or India will simply manufacture devices in congruence with Taiwan.

Meanwhile, IBTimes disclosed that Apple sought for a host country that is willing to offer a 15-year tax holiday. If this is the case with Bangalore, the benefits that the state can get are local employment plus hosting an iconic brand which can entice other investors.

Come to think of it, India is considered as the fastest-growing smartphone market in the world according to Counterpoint Technology Market Research. Apple is specifically showing strong sales in India with 2.5 million units sold from fiscal period October 2015 to September 2016. This represents a 50% rise in India's demand for high-end units.

Apart from Apple, Foxconn is also expected to make their facility in Maharashta up and running sometime this year. The company has allegedly made tie ups with brands like Xiaomi and OnePlus.