The company, which expects the centre to be operational in the next few months, will focus on localising its products and features for the Indian market through the unit.
"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 told PTI.
Jain declined however to comment on investment details and the number of people who would work at the R&D centre.
"The R&D unit will focus on India-specific products to begin with. We will focus on localisation, themes and then India specific features to cater to local requirements here," he said.
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India is one of the largest markets for Xiaomi outside of China. The company has so far, launched three devices in India - Mi 3, Redmi 1S and Redmi Note. The cumulative sales have crossed a million units since the first launch in July 2014.
The Mi 4 features a 5-inch display, 2.5GHz Qualcomm Snapdragon 801 quad-core processor, 3GB RAM and 16GB of internal memory and runs on a 3,080 mAh battery. It has a 13 megapixel rear and wide-angle (80-degree) 8MP front camera.
The device will be on sale on February 10 and pre- registration for the device will start at 6 pm on January 28.
The Chinese firm also announced that it will make MIUI 6, an update to its user interface (UI), available to its existing three devices by March.
Xiaomi, which has five exclusive Mi service centres (66 in total) plans to take the total number to 100 by the end of the year as it looks to strengthen its after-sales service.
Besides, Xiaomi is also looking at bringing in its own eCommerce website into the country to sell its products here.
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.