Under the plan, the government will extend fiscal support of
up to 50% of a project's cost to eligible display and semiconductor
fabricators, the government said in a statement.
Israel's Tower Semiconductor, Taiwan's Foxconn and a
consortium from Singapore have shown interest in setting up chip factories in
India while Vedanta Group was keen to set up a display plant, a government
source told Reuters.
Tower, Foxconn and Vedanta did not immediately respond to
requests for comment.
"The program will usher in a new era in electronics
manufacturing by providing a globally competitive incentive package to
companies in semiconductors and display manufacturing as well as design,"
the government statement said.
The drive comes as some companies look to diversify their
manufacturing bases beyond China due to the ongoing trade war between
Washington and Beijing and is a sign India is trying to move up the electronics
value chain.
The government's plan to incentivize semiconductor
manufacturing also comes at a time when automakers and tech companies around
the world are grappling with a global chip shortage. The government also
approved an incentive plan to support 100 local firms working on integrated
circuit and chipset designs.
Technology Minister Ashwini Vaishnaw told a news briefing
the plan would help develop "the complete semiconductor ecosystem - from
the design of semiconductor chips to their fabrication, packing and testing in
the country".
'ADVANCED TECHNOLOGY'
The government said it expected the scheme to create about
35,000 high-quality positions, 100,000 indirect jobs .
Prime Minister Narendra Modi's government has offered about
$30 billion in incentives to woo some of the world's largest electronics
manufacturers to set up shop in India and give the domestic industry a fillip.
The push has already helped make India the world's
second-biggest smartphone maker behind China.
It has also helped India win investment commitments from
Foxconn, Wistron and Pegatron - three of Apple's top contract manufacturers.
"The government's plan will help bring advanced
technology, more employment and bigger investments into India," said A Gururaj,
managing director of Indian contract manufacturer Optiemus Electronics.
"It will also help cut expensive tech imports."
Tata Group, one of India's biggest conglomerates, is
venturing into the semiconductor business and is in talks with three states to
invest up to $300 million to set up a chip assembly and test unit, Reuters
reported last month. - Reuters
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