Apple's biggest supplier Foxconn will start manufacturing iPhones in the southern Indian state of Karnataka by April next year, the state government has said.
The project will create around 50,000 jobs, it said.
Taiwan-based Foxconn manufactures the majority of Apple's phones.
The firm has been making older versions of iPhones at a facility in the neighbouring state of Tamil Nadu since 2017.
Last month, the company announced it had bought 1.2m sqm (13m sqft) of land near Bengaluru city in Karnataka.
Bloomberg reported Foxconn planned to invest $700m (£566m) on a new factory in the state. On Thursday, the Karnataka government said the project was valued at $1.59bn.
Land for the factory would be handed over to company by 1 July, it said in its statement.
According to Reuters, Foxconn has set a target of manufacturing 20 million iPhones a year at the plant in Karnataka.
Apple's decision to manufacture their flagship model in India and diversify its supply chains away from China comes as trade tensions rise between Washington and Beijing.
Apple makes most of its phones in China. In India, iPhones are assembled by several Apple suppliers, including Foxconn. It currently accounts for 5% of total iPhone production.
The company struggled to compete in the Indian market which is dominated by the much cheaper South Korean and Chinese smartphones.
Apple CEO Tim Cook was in India in April to launch the country's first two Apple stores.