The Indian government has approved a $10 billion incentive plan to attract semiconductor and display manufacturers.

The government will extend fiscal support of up to 50 percent of a project's cost for eligible display and semiconductor factories.

A government source told Reuters that Taiwan's Foxconn, Israel's Tower Semiconductor, and a consortium from Singapore have expressed interest in setting up facilities involved in chip development in the country. Vedanta Group is interested in building a display plant.

In November, Indian conglomerate Tata Group said that it was planning to invest up to $300 million on a semiconductor assembly and test unit.

"The program will usher in a new era in electronics manufacturing by providing a globally competitive incentive package to companies in semiconductors and display manufacturing as well as design," the government said in a statement.

Technology Minister Ashwini Vaishnaw said that the incentive package hoped to develop "the complete semiconductor ecosystem - from the design of semiconductor chips to their fabrication, packing and testing in the country."

The government expects the plan to create around 35,000 high-quality positions, 100,000 indirect jobs and attract investment worth 1.67 trillion rupees ($8.8 billion).

The incentives come as the world struggles with an acute semiconductor shortage, that has seen governments roll out large incentive packages to chip manufacturers.