Modi tells investors India wants to be "trusted partner"

India wants to become a trusted partner for the semiconductor industry and a chip maker for the world, Prime Minister Narendra Modi said on Friday, as global companies including Foxconn announced investment plans in the South Asian nation.

"To expedite the growth of the semiconductor sector in the country, we are continuously undertaking policy reforms," said Modi, who has made chipmaking the top priority of his economic policy.

Modi was speaking at the government's SemiconIndia annual conference in his home state of Gujarat which is being attended by top semiconductor industry executives. It comes after his initiative to lure companies has faced setbacks, with key investment proposals delayed or rejected in recent months.

At the event, US chipmaker Advanced Micro Device (AMD) said it planned to invest around $400 million in India over the next five years, as well as build its largest design centre in the tech hub of Bengaluru, while Foxconn Chairman Young Liu told news network CNBC-TV18 the world's largest electronics manufacturer would also invest $2 billion over the next five years, without giving details.

Modi's initial bid to offer incentives to semiconductor industry have floundered.

A few weeks ago, Foxconn backed out of a $19.5 billion chips joint venture with Vedanta, saying "the project was not moving fast enough". Foxconn has since decided to go solo.

Two other consortia, including one that involved Israel's Tower Semiconductor, had announced plans to invest $3 billion each, but the proposals have since stalled.

India is currently re-inviting applications under a $10 billion incentive scheme.

Speaking to CNBC-TV18, Liu said Foxconn had yet to find another partner for its India chipmaking venture.

Earlier this month, a top government official told Reuters the company, formally known as Hon Hai Technology Group, is in talks with Gujarat about a new chip plant. It is also in talks for a $200 million components plant in India's Tamil Nadu, where it assembles Apple's iPhones.

Most of the world's chip production is limited to a handful of centres, such as Taiwan. Modi's comment received endorsement from Foxconn.

Despite being a late entrant, India estimated the local chip market to be worth $80 billion by 2028, almost four times its $23 billion size now.

Any chipmaking ventures will help India create jobs for its largely youthful population. At the event, Micron Technology CEO Sanjay Mehrotra said a planned $2.7 billion semiconductor testing and packaging unit in Gujarat would help create about 5,000 jobs in the state.