Munsif Vengattil & Nivedita Baliu

BENGALURU (Reuters: India’s Vedanta (NYSE)) has been in negotiations with banks to borrow $2.5-3Billion to fund its plans for display and semiconductor production. The company is aiming to become India’s first-ever chipmaker.

In February, the oil-to metals conglomerate decided to expand into chip manufacturing. It formed a joint venture company with Foxconn in Taiwan. There is a $20 billion investment total.

Vedanta wants incentives from Prime Minster Narendra Modi’s Federal Government and is currently in negotiations with many Indian states. The company will raise $2.5 billion to $3B in bank debt once it has received subsidies and its final agreements have been signed.

We have relationships with Indian financial banks. They are being talked to,” Akarsh HEBAR, Vedanta’s Global Managing Direct of Display and Semiconductor Business said.

Vedanta seeks incentives like 1,000 acres (405 hectares), free land and lower power costs from the state governments to help it explore semiconductors and displays.

Hebbar spoke on the sidelines India’s first semiconductor conference. It was being held in Bengaluru. He said that the company expected a return of investment of 15-20% within the next five years.

He said, “Breakeven might happen somewhere in between. We will start to get profits slowly thereafter.”

Modi along with his IT ministers presented Friday’s plans for additional investment incentives. The conference heard that India wanted to be a leading player in global chips markets, which are currently dominated in Taiwan and some other countries.