Chinese technology giant Lenovo’s Motorola Mobility is said to be in talks with Indian smartphone manufacturer Lava International and listed contract manufacturer Dixon Technologies to manufacture up to a billion dollars worth of smartphones as it looks to shift a part of its capacity out of China, reports Economic Times.

If the deal materialises, Motorola Mobility would become the first Chinese smartphone maker to partner with an Indian player to domestically manufacture smartphones in India. Also, Motorola Mobility plans to export most of the India-made smartphones, which would make it the second Chinese player after Xiaomi to turn India into an export base.

If a deal is signed, it is expected that the two Indian companies could start manufacturing smartphones for Motorola Mobility in the January-March quarter.

Meanwhile, it should also be noted that both Lava International and Dixon Technologies were selected under the Government’s production linked incentive (PLI) scheme which seeks to promote India as a hub for manufacturing and exporting smartphones.

As an outcome of the scheme, the Indian manufacturers would be rewarded with monetary incentives for the phones manufactured in India, irrespective of the prices at which they are finally sold.