The ambitious site is a partnership between Indian metals conglomerate Vedanta and the Taiwanese electronics giant Foxconn.
According to a report by Nikkei Asia, the site will feature manufacturing plants for microchips, displays and other products. It will also feature a chip packaging and testing plant.
Nikkei reported that officials from Vedanta have been visiting a 400-acre site in Pune in the western state of Maharashtra that is thought to be the likely location for the hub.
In a recent interview with India's Business Standard newspaper Vedanta Chairman Anil Agarwal said the hub was intended to make India less reliant on global supplies of crucial electronic components, particularly semiconductors.
Agarwal said: "India imports around $16 billion of display glass [each year] and another $16 billion worth of semiconductors. I have to take a very big initiative that will change my country. For semiconductors, we have tied up with Foxconn. ... First production from the venture will start within two years."
Agarwal said around $10 billion of the investment will be made immediately, with the rest coming as the project expands. Agarwal said: "With this, more than semiconductors, we will be able to make [components] for several items, like cellphones, laptops and televisions."
Foxconn, the world's biggest electronics manufacturer, which makes products including iPhones and MacBooks, has also signaled its desire to increase its manufacturing of microchips.