A $4.5 billion deal under which Alphabet's Google will collaborate with India's Reliance Industries on a new smartphone likely heralds a big shake-up for the world's second-largest mobile market, industry executives and analysts say.

Reliance boss Mukesh Ambani, announcing the partnership at his company's annual meeting last week, said Google would build an Android operating system to power a low-cost "4G or even 5G" smartphone that Reliance would design.

The new phone is set to pose a major challenge to Chinese vendors such as Xiaomi and BBK Electronics, owner of the Realme, Oppo, and Vivo brands, which currently dominate a $2 billion market for sub-$100 smartphones in India.

Reliance executed a similar plan in 2017 with the launch of the JioPhone, a no-frills device that gave users internet access for as little as $20. JioPhone now has more than 100 million users, many of whom are internet first-timers.

The alliance will see Google invest $4.5 billion in Reliance' digital unit, which houses telecoms and fiber businesses as well as music and movie apps.

Jio Platforms has also since April won the backing of global financial and tech investors including Intel and Qualcomm, which could bolster its smartphone ambitions.