According to a government official, the government will provide production-related incentives of 110 billion rupees for the construction of Micron’s plant in Gujarat, Modi’s home state.

In advance of Prime Minister Narendra Modi’s trip to the United States this week, the Indian cabinet has given its approval to Micron Technology’s $2.7 billion plan to establish a semiconductor testing and packaging facility.

The government will provide production-related incentives of 110 billion rupees ($1.34 billion) for Micron’s plant to be built in Gujarat, the home state of Modi, the Indian official noted. He declined to give his name before a scheduled announcement during Modi’s visit to the United States.

Requests for comment from representatives of Micron and the Indian government, including the technology ministry, went unanswered.

The so-called Assembly Testing Marking and Packaging will be constructed in the city of Sanand, according to a reliable source. Such facilities do not produce semiconductor chips; instead, they test and package them. In the plant, Micron might manufacture and package the chips for customers, or other businesses could send their chips there to be tested and packaged before being shipped.

The insider also said that while Micron’s India plant would support Modi’s goal of turning India into a semiconductor hub, actual manufacturing was necessary for real success. Sources claim that three large companies, including a joint venture with Foxconn, who competed for Indian semiconductor efforts were having difficulties due to a lack of technological partnerships.

The Micron transaction would support the objective, but not incredibly so because establishing India as a semiconductor base still represents a significant piece of the problem.

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