Chinese telecoms equipment maker Huawei Technologies is to invest $500m in its research and development operations in the southern Indian city of Bangalore by 2015.
The move comes as part of efforts to avoid falling foul of tension between authorities in India and China over the disputed border territory of Arunachal Pradesh, according to the Financial Times.
The Chinese firm is attempting to gain more acceptance in India and capitalise on plans by Indian carriers to introduce high-speed wireless services.
In June 2009, Huawei complained that India is withholding contracts to the company over unfounded security concerns after India's state-owned BSNL dropped Huawei from a shortlist of suppliers in the regions closest to Pakistan.
The move was believed to be prompted by an Indian Intelligence Bureau report that said Huawei could not be trusted with the telecom expansion in the sensitive region.
Huawei now seeks to win orders to build third-generation networks in the world's fastest-growing mobile-phone market, according to Bloomberg.
The Indian government has announced plans to auction spectrum, which is expected to be made available to suppliers of 3G services by August.
India's biggest wireless carrier, Bharti Airtel, has said it plans to start providing 3G services by November.