India invites Japanese firms to take part in two chip FAB facilities

Commerce minister Anand Sharma urges FAB manufacturers in Japan to avail subsidy, other benefits offered by India

India today invited Japanese companies to take part in two proposed semi-conductor Wafter Fabrications (FAB) manufacturing facilities. The Cabinet recently gave in-principle approval to set up the two FAB manufacturing facilities and announced subsidy scheme for the same.

In a meeting with Hiromasa Yonekura, Chairman, Keidanren (Japan Business Federation) along with other Japanese Business representatives here, commerce and industry minister Anand Sharma urged all FAB manufacturers in Japan to avail subsidy, other benefits and support being offered by India.

Two electronic chip manufacturing units, which entail a combined investment of Rs 51,550 crore, and would enjoy government subsidy, are likely to be operational in the next two years.

Two consortia — one led by Jaiprakash Associates in association with IBM, and the other led by Hindustan Semiconductor — have proposed setting up these plants.

Electronic chip manufacturing was highly capital-intensive business and had long gestation period. No body was interested in setting up wafer fab here unless large concessions are given.

The two projects are said to be worth Rs 25,000 crore each.

The government will also hold 11 per cent stake in each project, while technology providers are required to hold 10 per cent stake.

The fab proposals get the subsidy under the Modified Special Incentive Package Scheme (M-SIPS) with some additions. The  government had  approved a Rs 10,000 crore incentives for manufacturing electronic products and components under M-SIPS. Companies that invest in special economic zones get 20 per cent subsidy on capital expenditure, while those operating out of SEZs get 25 per cent support.  

Addressing a joint session with Japanese prime minister Shinzo Abe later, Sharma said that Japan has  helped India in sharing its technology and manufacturing. "Together we have identified,  priority sectors such as economic corridors, strategic collaborations and joint ventures,"he said.

Over 1,000 Japanese companies are present  in India, he said.

"It is the first country that has helped us in the successful implementation of National Manufacturing  Policy," Sharma added.

Abe said,it is not only India that required Japan. Japan also required India, especially its human resource.