Feb 04, 2017 10:22 AM EST By Dan Camins, UniversityHerald Reporter

Apple will soon manufacture iPhones in Bengaluru (Bangalore), India, defying President Donald Trump who wants Apple to make iPhones in America. Reports say that Apple has reached an agreement in principle with the state of Karnataka, where Bengaluru is located.

The state's government confirmed that Apple will soon start making iPhones in the southern India's southern state of Karnataka after reaching an agreement in principle. Apple currently hold a 2% share of the Indian mobile phone market where predominantly Indian and Chinese made smartphones are current market leaders.

Being relatively cheaper, and about a fifth of the price of an iPhone, these phones are therefore the choice of consumers in one of the fastest growing smartphone markets in the world, according to CNN Tech. Apple lags in sales in India, behind Samsung and Chinese brands Xiaomi, Oppo, and Lenovo. Mainly due to Apple selling iPhones only through local distributors. Another factor in low sales is that Apple does not have a single Apple Store in India, in contrast to China where it has about 40, as of last count.

The reason for this is that Apple is being prevented to put up Apple Stores in India by a national rule that foreign retailers can only sell products if 30% of the raw materials used to craft the products are sourced locally. Having its own plant in the country could possibly allow the tech giant to put up its first Apple Store in India.

C|net reported that India, represents a huge potential market for Apple and other tech companies. Though earning the top spot in premium phones sales in 2016, iPhone only places 10^th overall among all phones sold there, bowing down to Chinese brands. Bloomberg estimates that 750 million smartphones will be sold in India by 2020. India currently has 300 million smartphone users, poised to take over the U.S. as the world's second largest market this year.

Indian made iPhones will be operated by Winstron, Apple's Taiwanese contract manufacturer, passing over Hon Hai Precision Industry Ltd., the main listed arm of Foxconn Technology Group. However, the group is said to be an option in the future.

Reports indicate that Apple might initially assemble the iPhone SE in India if plans push through. Winstron is the known manufacturer both the iPhone SE and the iPhone 5, which has similar chassis, for Apple.

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