Daijiworld Media Network - New Delhi
New Delhi, Mar 12: India is planning to launch a fund worth more than Rs 1 trillion (about $10.8 billion) to strengthen domestic semiconductor manufacturing as the country seeks to emerge as a global technology and manufacturing hub.
According to people familiar with the matter, the fund is expected to be unveiled within the next two to three months. It will provide subsidies for chip design projects, manufacturing equipment and the development of semiconductor supply chains. The proposal is still under discussion and details may change before the official announcement.
The move is part of Prime Minister Narendra Modi’s push to accelerate India’s semiconductor ambitions, which are currently in the early stages with only a few major projects underway.
Governments across the world are increasingly supporting their domestic chip industries to ensure technological self-reliance and meet rising demand driven by sectors such as artificial intelligence, smartphones, automobiles and consumer electronics.
India’s initiative, though smaller in scale, is similar to the CHIPS and Science Act in the United States, which allocates $52 billion to support local chip production. China has also been funding its semiconductor industry through large state-backed investment funds.
India hopes to attract global chipmakers by leveraging its strong engineering and design talent along with financial incentives. The strategy mirrors the country’s success in attracting companies such as Apple Inc. to expand manufacturing in India, where about 25 percent of the company’s iPhones are now assembled.
Officials said the proposed semiconductor fund will complement existing subsidies for smartphones and electronic components that aim to boost domestic manufacturing and exports.
The new initiative will build on India’s $10 billion semiconductor incentive programme launched in 2021, which offered to cover up to 50 percent of the cost of setting up chip manufacturing projects.
That programme has already attracted companies such as Micron Technology, which is establishing a chip assembly and testing facility in Gujarat.
Indian conglomerate Tata Group is also developing a semiconductor fabrication plant in Gujarat along with a separate chip packaging unit. Other projects, including a test and assembly facility by Foxconn Technology Group, have also been announced under the government’s semiconductor push.
While most of the initial projects are focused on producing less advanced chips, India aims to move up the value chain in the coming years. Union technology minister Ashwini Vaishnaw has said the country aims to build semiconductor capabilities comparable to leading producers such as Taiwan, South Korea and the United States by 2032.