Vedanta Ltd. has tied up with Hon Hai Technology Group to make semiconductors locally after India announced incentives for chip companies to boost domestic production.

Vedanta will hold the majority stake in a joint venture with Foxconn, as Taiwan's Hon Hai is also called, according to a media statement said. Vedanta Group promoter Anil Agarwal will be the chairman of the JV.

Discussions are on with a few state governments to finalise the location of the plant, the statement said.

The deal follows India's recent policy to offer Rs 76,000-crore production-linked incentive for chipmakers as part of Prime Minister Narendra Modi's initiative to boost domestic electronics manufacturing.