Israel's Tower Semiconductor has submitted a proposal to the Indian government for the construction of a $8 billion chip fabrication plant in the country.

According to a report in the Indian Express, Rajeev Chandrasekhar, the Minister of State for electronics and IT, met with Tower’s CEO Russel Ellwanger in October to discuss the plan.

It is believed the government hopes to approve the proposal before India’s upcoming general election.

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Tower Semiconductor has plans to build in India – Getty Images

The Israeli semiconductor manufacturer is hoping to produce 65nm and 40nm chips at the plant for use in automotive and wearable electronics.

Tower submitted the proposal for the semiconductor fab under India’s Modified Programme for Semiconductors and Display Fab Ecosystem. The $10 billion scheme allows companies to apply for up to 50 percent of capital costs for eligible semiconductor and display manufacturing projects, meaning the Indian government would stump up $4bn for this venture.

The company had previously applied to the scheme in partnership with international consortium ISMC, with a proposal to build a $3bn plant in India’s southern Karnataka state. However, that plan ran into issues relating to Intel’s since-cancelled plan to acquire Tower.

Despite the $5.4bn acquisition not going ahead due to pushback from regulators, a new deal that will see Intel provide US foundry services and 300mm manufacturing, with Tower investing up to $300 million to “acquire and own equipment and other fixed assets” at Intel Foundry Services' (IFS') New Mexico fabrication plant.