UPS in talks with govt to make some parcel-tracking tags in India: Official

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United Parcel Service, the world's biggest parcel delivery firm, is in talks with several Indian state governments to make some of the tags used in tracking packages in the Asian country, a senior executive told Reuters on Wednesday.

Semiconductor manufacturing is among Prime Minister Narendra Modi's key business agendas as he pursues an ambition of making the country a chipmaker for the world, even though the Indian government faced setbacks in its initial bid to offer $10 billion in incentives to the industry.

"We are working with potential partners ... What we are trying to do in India is leverage the semiconductor investments the government is making," Chief Digital and Technology Officer Bala Subramanian said in an interview.

UPS began expanding its use of radio-frequency identification (RFID) tags on packages about two years ago, helping its workers avoid millions of package scans per day and reducing lost and misdirected packages.

"For every place across the world we'll be actually building ... the tags in India," Subramanian said, without giving details on the investment size or when it would begin manufacturing, adding it is "too early" to discuss such details.

Reuters could not immediately verify where UPS makes the RFID tags it currently uses.

UPS does not currently have any manufacturing capability in India, though it opened in August its first technology centre in Chennai, Tamil Nadu, which complements its existing US and European teams to develop in-house technology.

"We will continue to grow (in Chennai)," Subramanian, who was previously the digital chief for Best Buy and AT&T, said.