Vedanta selects Modi's home state for $20bn foray into Indian semiconductors - sources

Vedanta selects Modi’s home state for $20bn foray into Indian semiconductors – sources

A man walks past a Vedanta logo outside the headquarters in Mumbai, India on January 31, 2018. REUTERS/Danish Siddiqui

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NEW DELHI, 12 Sep. (Reuters) – Vedanta Ltd. (VDAN.NS) selected Indian Prime Minister Narendra Modi’s home state of Gujarat for its semiconductor project, two sources told Reuters, in a major first step in a $20 billion joint venture with Taiwan’s Foxconn (2317.TV).

Vedanta has received financial and non-financial subsidies, including for capital costs and cheap electricity from Gujarat to build semiconductor factories, a first person familiar with the matter said.

The project will involve manufacturing displays and semiconductors near the western state’s largest city, Ahmedabad, the source added, declining to be named until the official announcement.

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Lobbying for stimulus, Vedanta has asked for 1,000 acres (405 hectares) of free land on lease for 99 years, and water and electricity at concessional and fixed prices for 20 years, Reuters reported in April. read more

A spokesperson for Vedanta did not respond to a request for comment, and Foxconn did not respond immediately.

A senior official at the Gujarat Department of Science and Technology and another in the office of Chief Minister Bhupendrabhai Patel declined to comment.

The source added that a formal signing of a memorandum of understanding between the two parties is expected this week, likely to include Patel and Vedanta officials.

Other regions, including India’s richest state of Maharashtra to the west and Telangana and Karnataka to the south, also bid for the site of the Vedanta-Foxconn megaproject.

But in the last round of negotiations in recent weeks, Gujarat nominated Maharashtra for the post.

The government estimates that India’s semiconductor market will reach $63 billion by 2026 from $15 billion in 2020.

Much of the world’s chip production is limited to a few countries such as Taiwan, and India, a latecomer to the market, is now actively luring companies to “open a new era in electronics manufacturing” as it looks for ways to seamlessly access chips.

Vedanta, an oil and metals conglomerate, decided in February to diversify its chip business and entered into a joint venture with Foxconn.

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Reporting by Aditya Kalra and Muncif Vengattilla in New Delhi, additional reporting by Sumita Khanna in Gujarat; Edited by Emilia Sithole-Matariz

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