Vedanta, Foxconn Sign Deal To Set Up $20 Bln Semiconductor Unit In India

(RTTNews) - Conglomerate Vedanta Ltd (VEDL) and Taiwan's Foxconn have signed a deal with the Indian state of Gujrat to invest nearly $20 billion to set up semiconductor and display production plants in the state.

According to the state of Gujrat, which is the home state of Indian Prime Minister Narendra Modi, the investment is the largest ever by any group in an Indian state. This deal has been announced just ahead of key local elections in the state.

Foxconn will bring technical expertise to the venture, while Vedanta will finance the project. The state of Gujarat will offer subsidies on capital expenditure and electricity to set up units near the western state's largest city, Ahmedabad.

The companies on Tuesday said the Vedanta-Foxconn joint venture project will create more than 100,000 jobs in Gujarat.

The state of Gujarat will "offer every possible help in this project," said Chief Minister Bhupendrabhai Patel at a press event Tuesday. "Every state government department will also provide all possible assistance to make this project successful."

The Vedanta venture aims to start manufacturing display and chip products within two years, Vedanta Chairman Anil Agarwal told a public event in Gujarat, where an agreement was signed with the state officials.

"India's own Silicon Valley is a step closer now," Agarwal said in a tweet after the event.

"This MoU is an important step accelerating India's semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs," Prime Minister Narendra Modi tweeted.

Vedanta will setup a display manufacturing unit with an investment of 945 billion rupees ($11.95 billion) and separate chip-related production units by investing 600 billion rupees ($7.58 billion), the state government said in its statement.