New Delhi, Aug. 31 -- The IT ministry is inviting global technology companies to build a second commercial chip fabrication plant, as part of a push to establish the country as a major semiconductor hub while reducing direct government subsidies. Under a fresh programme known as Semicon 2.0, New Delhi will offer up to 40% in cash incentives for a modern facility operating on standard 12-inch wafers, tightening eligibility rules to target established manufacturers capable of deploying at least Rs.20,000 crore ($2.1 billion) of their own capital.

The new strategy signals growing confidence among Indian officials that a strengthening supply chain will attract serious investors even with lower state hand-outs. The original incentive plan, wh...