NEW DELHI—Chinese smartphone seller Xiaomi Corp. said Monday its handsets are now being assembled in India, as global electronics manufacturers look to ramp up production in the increasingly important and fast-growing market for their wares.

Xiaomi’s phones will be put together in a plant run by Taiwanese contract manufacturer Foxconn, which over the weekend signed an agreement to spend $5 billion on factories and research and development in the western Indian state of Maharashtra.

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