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Apple contract manufacturer Wistron is planning a new iPhone production facility in Bengaluru, India, according to Reuters, and will likely begin assembling inexpensive iPhone 6s models there for Indian customers. The iPhone 6s would potentially replace the iPhone 6, which Apple has been selling in India despite discontinuing it in other countries, and might supplant the iPhone SE, which Wistron has been producing in India since last year.

Despite its status as the second-largest smartphone market in the world, India has presented major challenges for Apple, largely due to high price sensitivity and regulations impacting foreign products. Apple’s already high iPhone pricing has been increased by significant Indian taxes, and laws have impeded the company’s attempts to establish an official retail presence in the country. The iPhone SE was spared recent tax increases due to its domestic manufacturing.

Over the last year, Apple has lobbied the Indian government in an effort to increase the company’s less than 3 percent market share in the country, asking for regulatory changes that would let it open retail stores and expand domestic manufacturing. To that end, India relaxed a rule limiting foreign investment earlier this month, and Wistron recently won approval to import Chinese machines that could assist with iPhone production.

It’s unclear how a locally made iPhone 6s will impact the iPhone lineup in India. The iPhone 6s and iPhone SE share the same Apple A9 processor and, apart from chassis and screen size differences, they are substantially similar devices, making the 6s a potential replacement for the SE. On the other hand, the SE might be upgraded. Rumors of a redesigned “iPhone SE 2” were partially shot down this week by reliable KGI Securities analyst Ming-Chi Kuo, who suggests that Apple will at most improve the iPhone SE’s processor and lower the price to retain its appeal to budget customers.

Update at 10:09 a.m. Pacific: Despite its modest overall Indian market share, Apple leads the country’s premium smartphone sector. The Economic Times reported today that Apple’s iPhone X helped the company command a 46.9 percent share of India’s growing premium smartphone business in the last calendar quarter of 2017 — more than 20 percent higher than the number two-ranked OnePlus and up nearly 9 percent year-over-year. However, premium smartphones account for only 4 percent of the Indian market.

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