NEW DELHI (Reuters) -India’s government on Wednesday raised fiscal support for new semiconductor facilities to cover 50% of project costs and said it will remove a ceiling for maximum permitted investment for display manufacturing as it moves to boost local production.
The announcement comes as Prime Minister Narendra Modi’s government seeks to attract more big-ticket investments under a $10 billion incentive plan for chip and display production, aiming to make India a key player in the global supply chain.
“On the basis of discussion with potential investors, it is expected that work on setting up the first semiconductor facility will commence soon,” a government statement from Wednesday said.
The government had previously agreed to cover between 30% and 50% of the cost of setting up new display and chip plants. It said on Wednesday that it will also cover 50% of the capital expenditure required to set up semiconductor packaging facilities.
Last week oil-to-metals conglomerate Vedanta and Taiwan’s Foxconn signed a pact with India’s Gujarat to invest $19.5 billion in the western state to set up semiconductor and display production plants.
Vedanta is the third company to announce a chip plant location in India after international consortium ISMC and Singapore-based IGSS Ventures, which are setting up in the southern states Karnataka and Tamil Nadu respectively.
(Reporting by Munsif Vengattil in New Delhi; Editing by Louise Heavens and Jan Harvey)
