Though Inventenc refused to disclose the devices it will manufacture at the Chennai plant, the report said "the production lines are likely to roll out smartphones and other devices for China-based Xiaomi Technology initially, according to industry watchers."
The production is likely to begin at the end of the second or beginning of the third quarter of 2015.
Chinese handset maker Xiaomi also recently announced plans to set up a research and development unit in Bangalore, its first such facility outside of its home country.
"We have always stated that India is one of our most important markets. We are in process of signing the lease on a facility in Bangalore, which will be our R&D unit. This is the first one outside China," Xiaomi India head Manu Jain said.
Work on the facility is expected to commence by the end of March and in the next few months, it will be operational, Jain added.
Besides, Xiaomi is also looking at bringing in its own e-commerce website into the country to sell its products here.
India is one of the largest markets for Xiaomi outside of China.
Founded in 2010 by serial entrepreneur Lei Jun, Xiaomi is often referred to as the 'Apple of China' and featured in Boston Consulting Group's top 50 most innovative companies in the world list last year.