Chinese smartphone brand Honor will relaunch in India through a licensing deal with a local company and is aiming to start domestic manufacturing by early next year, its country head told Reuters.

Honor had stopped selling its smartphones in India and reportedly retreated last year amid limited marketing budget and less prudent portfolio management.

"India was never a focus market for the Huawei Technologies-owned Honor until 2020 - when it was forced to spin-off the brand and reassess strategy," said Neil Shah, vice president at Counterpoint Research.

Honor's comeback is underpinned by a licensing deal with a newly formed Gurugram-based firm Honor Tech for an undisclosed "agreed-upon cost" tied to the transfer of technology and hardware.

It will launch three variants of Honor phones in India, with the mid-ranged Number series expected by September.

The company, wholly owned by local shareholders, will make, sell and service Honor-branded smartphones in India.

"All the phones will be eventually manufactured in India," CEO Madhav Sheth said, without disclosing further details.

"The biggest challenge with the (Indian) government in the past was how can a (Chinese) brand be accountable in India?," said Sheth, a former executive at rival Realme who was credited for its India expansion.

Of late, Chinese businesses have struggled in India with the government banning several apps and stepping up scrutiny on investments to stave off takeover moves from its neighbour.

Honor will compete with the likes of Samsung Electronics - the top seller in India with a near 20 percent market share - followed by Vivo, Xiaomi, Realme, and others, per Counterpoint Research.

Honor Tech aims to capture a 5 percent share of India's smartphone market by sales volumes in 2024, with a revenue of at least Rs. 10,000 crore, Sheth said. © Reuters