Contract manufacturer Dixon Technologies announced a partnership with the Indian division of Xiaomi Corp to produce and export phones for the Chinese smartphone maker.

The announcement follows Xiaomi India's announcement that it is collaborating with the electronics company Optiemus to produce wireless audio devices in the country.

Xiaomi formerly held the top spot in the Indian smartphone industry, but it has since waned in the face of increased regulatory scrutiny and fierce competition. The pressure by Indian government agencies on Chinese enterprises, notably Xiaomi, has prompted those companies to look into manufacturing partnerships with local partners.

In an effort to cut costs, Xiaomi India President Muralikrishnan B. told Reuters earlier in March that the company would expand beyond its present network of 20,000 retail partners and increase local procurement of mobile phone parts.