Xiaomi has announced on Monday its initial investment of $25 million in India's Hungama Digital Media Entertainment which is an online provider of videos and music. Other investors who rounded the funds are Indian billionaire Rakesh Jhunjhunwala, Bessemer Venture Partners and Intel Capital.

For the record, this is the first time that Xiaomi made an investment in an Indian company. It signifies the deepening of Xiaomi's scheme to present localized Internet services on its smartphones in India.  It also cements Xiaomi's allegiance in India.

"We are investing in Hungama not only to start integrating content into our smartphones, but also to grow together with them and deepen our understanding of the content sector in India. We have carefully selected Hungama because of what they are doing in terms of aggregating large amounts of content and delivering an amazing user experience," said Hugo Barra, Xiaomi vice president, as quoted by IBN Live.

Xiaomi is the world's fifth largest smartphone manufacturer and is competition with Apple Inc., Samsung Electronics Co. and others in marketing devices in India.  India has a population of 1.2 billion an approximated 220 million smartphone users, as reported by Bloomberg.

"India is a fast-growing, strategic geography for us and it's about time we established our services offerings here," said Hugo Barra, Xiaomi's vice president of global operations. Xiaomi will start integrating Hungama's content, including themes and ringtones, into its products.

According to the Hindu Business Line, services revenue is a huge part of Xiaomi's business scheme in China with its own application store and earns from gaming and cloud storage, video on demand and music on demand services.

In India, the smartphone company has not yet developed any services business as it is hard to make locals pay for content. Xiaomi will soon begin including Hungama's content services into its platforms integrating as well themes and ringtones.