Aditya Kalra, Munsif Vegattil

NEW DELHI (Reuters) – In a race for India’s premier chipmaker, Vedanta Ltd (NYSE 🙂 Ltd seeks 1,000 acres (405 hectares) free of state taxes and offers other incentives to help it achieve its $20 billion investment in semiconductor and display manufacturing.

According to the conglomerate, oil-to-metals said in February that it plans to diversify into chip manufacturing. It also announced plans for a joint venture to Taiwan’s Foxconn as part of Prime Minister Narendra Modi’s efforts to make India a major semiconductor production hub.

Vedanta, though seeking federal support under the Modi programme of fiscal assistance, is asking for states to lease 1,000 acres free on 99 year leases. According to two sources who have direct knowledge,

It will need 700 acres of land for its facility and the rest to support ancillaries.

Vedanta informed state governments it would generate tax revenues of up to $2.2 billion per year over the next 20 years. It also promised them that they could create as many direct and indirect jobs as possible, according to the first source.

Sources say that the company is currently reviewing proposal from three Indian states: Telangana, Karnataka, and Maharashtra, in the west.

Vedanta declined to comment on a request. Reps from the departments of IT and Industries in all three countries did not respond immediately.

India and more corporations are exploring ways to seamlessly access chips. Chips will form the basis of critical future technologies, such as 5G and artificial intelligence.

The majority of world’s chip production is concentrated in a handful of countries, such as Taiwan or the United States. India is a late entry, but it’s actively trying to lure companies. In December, the country stated that it wanted “ushering in a new age in electronics manufacturing.”

According to the government, India’s semiconductor market will reach $63 billion by 2026 from $15 billion in 2020.

The majority of chip plants consume large amounts of electricity and water, and this can often be a problem for Indian industry.

Vedanta has been lobbying states to demand water and power for 20 years at fixed and concessionary rates, sources claimed.

First source said that Vedanta believes its plants will consume 40 million litres daily by the time they reach maturity. This would roughly equal the water needed for cities with over 300,000. According to the Indian government’s suggested threshold for urban water supply, this is the minimum amount.

A separate matter, Modi’s federal plan could provide half-finance support for capital expenditure, however, Vedanta wants additional incentives from States, according to a source.

India is hosting a three-day semiconductor conference at its tech center of Bengaluru, with the aim to draw more international investments. Modi will officially inaugurate it.

Singapore’s IGSS Ventures & ISMC is a joint venture of Abu Dhabi’s Next Orbit Ventures, Israel and Singapore. Tower Semiconductor (NASDAQ:) They also requested federal incentives as part of Modi’s program.