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India's cabinet has approved U.S. chipmaker Micron Technology's $2.7 billion plan for a new semiconductor testing and packaging unit, a senior government source said on Tuesday ahead of Prime Minister Narendra Modi's state visit to the U.S.

India is poised to approve a $3-billion investment by US semiconductor company Micron to set up an outsourced semiconductor assembly and test (OSAT) unit with at least four assembly lines, people in the know told ET.