An India plant for manufacturing would give Tower a foothold in a key emerging market and help it move out of the shadow of its failed acquisition bid by Intel Corp. Although Tower’s sales are a fraction of giants Intel and Taiwan Semiconductor Manufacturing Co., it makes components for large customers such as Broadcom Inc. and serves fast-growing sectors like electric vehicles.

Tower’s plan is to scale up a plant over a decade and eventually produce 80,000 silicon wafers per month, one of the people said. If approved, this would be the first fabrication unit in India operated by a major semiconductor company.

The Tata conglomerate is expected to partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for its project, though it has also held talks with United Microelectronics Corp., the people said. The $150 billion Tata group has previously said it plans to begin construction of a chip fabrication plant in Dholera this year.

Both Tower and Tata’s facilities would produce so-called mature chips — using 40-nanometer or older technology — that are very widely used in consumer electronics, automobiles, defense systems and aircrafts, the people said.

The Tata Group is also planning to build a 250-billion-rupee ($3 billion) chip-packaging plant in eastern India that will assemble and exports chips, including for automakers such as the group-controlled Tata Motors Ltd. That will similarly require the government’s approval before proceeding.

The moves are part of Tata’s nascent push to invest billions of dollars in high-tech businesses. Tata operates India’s biggest smartphone component plant, constructed at a cost of more than $700 million, in southern India. It also bought Apple supplier Wistron Corp.’s India factory last year and is seeking to build its own iPhone plant.

Separately, Japan’s Renesas Electronics Corp. is looking to forge a venture with Murugappa Group’s CG Power and Industrial Solutions Ltd. arm for a chip-packaging facility.

Representatives for Tata, PSMC and UMC declined to comment. Representatives of India’s tech ministry and Tower didn’t respond to requests for comment.

All of the chip proposals require the assent of Modi’s cabinet, which could come withing weeks. To quality for state subsidy, any chip project will have to make detailed disclosures including whether it has binding agreements with a technology partner for production. Applicants also need to disclose financing plans as well as the type of semiconductors they’ll make and their target customers.

Modi is leveraging India’s geopolitical clout to become an indispensable partner for American tech ambitions, as the US clashes with China on a range of issues including trade. India wants to present itself as a stable democracy and reliable tech center to international partners interested in investing.

--With assistance from Jane Lanhee Lee and Marissa Newman.

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