India could be ready to take on asia as a major site for making chips, according to a Reuters report.

New government incentives to boost chip making, coupled with India's low labour costs and surging demand for electronic goods from a fast-growing middle class make it a good place to set up shop.

Hindustan Semiconductor Manufacturing, which is backed by a group of Indian investors based in Silicon Valley, announced plans to build two chip-making plants in India for up to $4.5 billion using technology from Germany's Infineon Technologies AG.

Poornima Shenoy, president of lobby group India Semiconductor Association said that India would be the only country in the world with robust models in chip design, chip manufacturing and electronics manufacturing.

The prediction is that the Indian chip makers will focus on local markets first, but will break out of that mould later.

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