Importantly, Foxconn will be assembling the most expensive models, such as devices in the flagship iPhone X family, the source said, potentially taking Apple's business in India to a new level.
Tamil Nadu Industries Minister M C Sampath told Reuters that Foxconn had lined up a Rs 25 billion ($356 million) investment at its Sriperumbudur plant.
Reuters reported that Foxconn now makes Xiaomi phones in India, while Apple already uses Taiwanese Wistron Corporation's facilities in Bengaluru to manufacturer the company's lower-end iPhone SE and iPhone 6S devices.
This had a ripple effect on Foxconn since Nokia was its biggest customer and more than 70% of the parts manufactured by Foxconn went to Nokia India to build its handsets.
Apple's decision to manufacture iPhones in India likely stems from the ramifications of the ongoing trade war between the USA and China, started by President Donald Trump earlier this year. In all probability Apple would look at exporting units made locally as cost-sensitive India is not yet a major market for it. CIRP reported in June that Android users were more likely to switch to Apple's cheapest model, which at the time of the report was the iPhone SE, because they were hesitant to splurge on the iPhone X.
Still, it could potentially get Hon Hai to make the older iPhone X version in India in a bid to get a bigger share of the world's fastest-growing major mobile phone market.
Following the November 2017 launch of the iPhone X, 11 percent of iPhone sales were to customers upgrading from an Android.
Moreover, it is also not clear if any iPhone assembly is being shifted to existing Foxconn facilities in China or somewhere else. It is however unclear whether the production will be confined to assembly or include any component production in the country.
Apple did not immediately respond to a Fortune request for comment on the report.