The Union Cabinet approved US chipmaker Micron Technology’s $2.7-billion plan for a new semiconductor testing and packaging unit, a senior government source said on Tuesday as Prime Minister Narendra Modi arrived in the US on a State visit. 

The government agreed to production-linked incentives worth Rs 11,000 crore ($1.34 billion) for the plant, which is set to be built in Gujarat, the official added. He declined to be identified ahead of a planned announcement during Mr Modi’s visit. 

The Cabinet’s approval was required due to the size of the incentive package, the source added. Micron’s plan had been previously reported but not the approval by the Cabinet. 

During his visit, which started on Tuesday, Mr Modi will meet the chief executives of a number of top American companies, including FedEx and MasterCard, and will be hosted at a State dinner in the White House on June 22. 

Micron Technology’s plans come as the White House presses US chip companies to invest in India with talks ongoing about possible further investments, US administration officials told the Reuters. 

Mr Biden wants domestic companies to decrease the risks of doing business in China while better integrating the US economy with that of India, the world’s largest democracy, a US official said.