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Taking the first major step in its $20 billion joint venture with Taiwan’s Foxconn, Vedanta Ltd has selected Prime Minister Narendra Modi’s home state, Gujarat, for its semiconductor project, quoting sources news agency Reuters said on Monday.
According to the report, Vedanta obtained financial and non-financial subsidies, including on capital expenditure and cheap electricity from Gujarat to build semiconductor plants, one of the sources privy to the development said.
The project will include display and semiconductor facilities near Ahmedabad, the source added.
While lobbying for incentives, the Mumbai-headquartered oil-to-metals conglomerate had sought 1,000 acres (405 hectares) of land parcel free of cost on a 99-year lease, and water and power at concessionary and fixed prices for 20 years, Reuters reported in April.
A spokesperson for Vedanta did not respond to Reuters’ request for comment, while Foxconn did not immediately respond.
A senior official in Gujarat’s science and technology department, and another in Chief Minister Bhupendrabhai Patel’s office, also declined to comment.
However, an announcement is expected this week with a formal signing of a memorandum of understanding (MoU) between the two parties, which is likely to be attended by Patel and Vedanta officials.
Other states, including Maharashtra, Telangana, and Karnataka had also been in the running to host Vedanta-Foxconn’s mega project. But in the last leg of negotiations in recent weeks, Gujarat pipped Maharashtra to the post.
According to the government, India’s semiconductor market is estimated to reach $63 billion by 2026 from $15 billion in 2020.
Most of the world’s chip output is limited to a few countries like Taiwan and late entrant India is now actively luring companies to “usher in a new era in electronics manufacturing” as it seeks for ways to have seamless access to chips.
Vedanta decided in February to diversify into chip manufacturing and formed the joint venture with Foxconn.
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