Vedanta and Foxconn are to invest Rs1.54tn ($19.4bn) in Prime Minister Narendra Modi’s home state of Gujarat to construct one of India’s first semiconductor manufacturing complexes — part of a high-stakes, government-supported push to build domestic chipmaking capacity.

The Indian mining and industrial group and the Taiwanese agreement maker picked Gujarat over neighbouring Maharashtra, which was likewise competing for the business, for their joint venture. Vedanta’s chair Anil Agarwal said on Twitter it would present to “India’s own Silicon Valley . . . a step closer now”.

Under agreements signed between the organizations and Gujarat’s government, they will set up an integrated semiconductor and display production complex aimed at feeding India’s developing demand for microchips in the cell phones, cars, computers and different gadgets it makes. Vedanta and Foxconn will hold 63% and 37 percent stakes respectively in the chipmaking venture, Agarwal said, and Vedanta will hold 100% of the facility’s display glass production unit.

“India has enough demand for five to 10 such fabs, and we are going to mostly capture the local demand,” Vedanta’s chair told the Financial Times. “Total demand today in both semiconductor and glass is about $30bn to $35bn, and India is going to be in 10 years’ time a $350bn market.”

Agarwal said the complex would be operational by 2024, then require an additional a half year to a year to reach full capacity. “This is the first factory, the largest investment,” he said.

In a statement, Foxconn said Gujarat had been “recognised for its industrial development, green energy and smart cities” as well as its “improving infrastructure” and government support for the venture.

The plant will be one of the first tangible results of India’s state-backed push into chipmaking. The Modi government in December approved a $10bn incentive plan expected to lure investors into microchip manufacturing and related concerns, for example, display glass.

IGSS Ventures, a Singaporean chipmaker, earlier this year signed a memorandum of understanding with the state of Tamil Nadu in southern India to construct a wafer “fab”, for which it says it plans to sign binding agreements by the final quarter of this current year, prior to launching production by mid 2025.

ISMC, a joint venture between Israel’s Tower Semiconductor and Abu Dhabi-based Next Orbit Ventures, has signed a letter of goal with Karnataka, one more southern state, to construct a chipmaking plant there.

“It is PM Modi’s vision to establish India as a global manufacturing hub and a major player for semiconductor supply chains,” Gujarat’s government said in a statement announcing the deal.

Be that as it may, doubters about India’s impending push into chipmaking have questioned whether the early business will at any point prevail with regards to rivaling occupant producers of top-end chips in Taiwan, China, South Korea and somewhere else, when the US, EU and others are additionally promoting their own industries. Some have contended that the government subsidies for chipmakers may be better put to use training local IT specialists, who could add to different pieces of the worth chain in which India’s lower work costs give it an edge, for example, semiconductor packaging or design.

Gujarat’s government said the joint venture would produce around 100,000 new jobs in the state. Agarwal said Gujarat had pledged subsidies on capital investment and power, alongside 400 acres of land within an hour’s drive of the state’s biggest city, Ahmedabad.