Lenovo said it will expand its product roll out at Croma in 2016. The company will be directly taking on Samsung and other market leaders to become a top tree smartphone vendor in the country.

But Beijing-based Xiaomi has avoided the brick-and-mortar route, relying instead on the online e-commerce retailer Flipkart.com. Xiaomi's "everything goes online" strategy saves costs with the large rural population also potential buyers.

Karthik J, senior market analyst at IDC, said online sales are impressive.

"Online retailers such as Flipkart, Snapdeal, and Amazon are driving shipments of the Chinese vendors, who have been aggressively trying to capture the 4G smartphone market in India," Karthik said.

In May, Xiaomi, partnering with Taiwan-based contract manufacturer Foxconn, opened its first overseas smartphone manufacturing plant near the southern city of Sri City in Andhra Pradesh.

Lenovo quickly followed, kicking off handset productions in the port city of Chennai.

In October, another red hot maker, OnePlus, also opened an assembly facility in India.

"All our handsets are made in China and then shipped to India. Making products locally will help reach our Indian customers faster and more effective," Pete Lau, chief executive of the Shenzhen-based company said.

A "make in India" campaign by the government has also helped spur companies to take advantage of potential tax breaks and incentives.

Lau said the company is planning to sell 1 million smartphones in India by the end of this year.

"Making devices in India will help the vendors lower expenses as labor cost in Chinese factories continue to rise," Wong from Canalys said.