Computer hardware major Dell Inc. Thursday announced it would establish its first Indian manufacturing facility in Tamil Nadu.

Dell expects to begin the unit in the first half of 2007 that will initially focus on production of desktop computers, which make up about 70 percent of Dell's current business in India.

The new facility and related operations will be located in a 50-acre land area in Sriperumbudur Hi-Tech Park, outside of Chennai.

Formalising the plan, a memorandum of understanding (MoU) was signed here by Shaktikanta Das, industry secretary of Tamil Nadu, and Rajan Anandan, vice-president of India sales, Dell, in the presence of Chief Minister K.M. Karunanidhi and Union Communications and IT Minister Dayanidhi Maran.

"This MoU benefits both Tamil Nadu and Dell, and we are very appreciative of the cooperation and partnership between the government and our company," said Paul-Henri Ferrand, vice president of Dell's South Asia region.

In its most recent operating quarter, Dell shipments in India increased 82 percent while revenue grew 63 percent, according to a release.