NEW DELHI: In a bid to increase domestic production, the Indian government on Wednesday increased fiscal support for new semiconductor facilities to pay 50% of project costs and announced it would eliminate a cap on the maximum authorised investment for display manufacturing.
In an effort to establish India as a major player in the global supply chain, Prime Minister Narendra Modi's government is making the announcement as it works to entice further high-value investments under a $10 billion incentive scheme for chip and display manufacturers. On the basis of discussion with potential investors, it is anticipated that construction on the first semiconductor facility will start soon, a government statement from Wednesday reads.
Previously, the government had committed to pay between 30% and 50% of the price of establishing new display and chip facilities. On Wednesday, International Business Machine Corporation said that it will also pay for half of the startup costs for semiconductor packaging plants. A deal to spend $19.5 billion in Gujarat, India's westernmost state, was struck last week by the oil-to-metals company Vedanta and Taiwan's Foxconn. The money will be used to build semiconductor and display manufacturing facilities.
After the Israel-based International Semiconductor Consortium and Singapore-based Innovative Global Solutions & Services (IGSS) Ventures, which are established in the southern states of Karnataka and Tamil Nadu respectively, Vedanta is the third business to announce the location of chip production in India.