The Korean chaebol, LG Electronics, is planning to invest $250 million in India over six years in its consumer electronics, home appliances, IT and mobile phones businesses. The $60 million mobile phone unit will be based in Pune.

This is the first time a global handset maker is setting up such a unit in India. The proposed plant is expected to commence production of GSM handsets by 2005.

LG is also planning to set up a manufacturing unit to roll out CDMA-based handsets, which could come up in Noida in Uttar Pradesh.

By 2010 the company aims to produce 20 million mobile phones, of which 50 per cent will be exported.

"A mobile phone plant in India will give us an edge over other players in terms of quality, production and subsequent market share," said KR Kim, managing director, LG Electronics.

The company is also looking at setting up a research and development facility for mobile phones in India. Bon Moo Koo, chairman and chief executive officer, LG Group, said: "India is an important market and LG India has top priority for investments. There will be fresh infusion of funds over the next years from 2005 to 2010, which will be close to $250 million. The investments will be for expanding our current facilities as well as for new capacities."

For its consumer electronics and home appliances business, LG has set up its second greenfield facility at Ranjangaon in Pune at an investment of Rs 150 crore ($32 million).

Currently the company has only one facility at Noida. The new facility will manufacture colour televisions, air conditioners, refrigerators, washing machines, microwave ovens and colour monitors.

LG India will become the export hub for LG Worldwide, catering to the Middle East and African markets.

The company aims to touch an export turnover of $3 billion by 2010 from India, which will contribute to 30 per cent of the Indian arm's turnover.