India is poised to enter the high-stakes global semiconductor manufacturing arena within the next five years, leveraging its unparalleled design capabilities and offering incentives totaling USD 10 billion to attract manufacturers to establish new fabs and units. According to IT and Telecom Minister Ashwini Vaishnaw, India’s well-crafted policies are enticing manufacturers to set up new fabs and invest in related sectors.
Semiconductors are vital components of electronic devices, utilized in a wide array of products from automobiles to computers, mobile phones, and household appliances. India already hosts factories of renowned automobile companies such as Renault-Nissan and Hyundai, computer manufacturers like Dell, suppliers to Apple, and electronic manufacturers like Samsung, producing a variety of consumer electronics.
Now, India aims to elevate its position in the manufacturing value chain by venturing into high-stakes semiconductor manufacturing. The government’s incentives, totaling Rs 76,000 crore, have attracted four major players, including Micron and Tatas. Vaishnaw highlighted that India already possesses about one-third of the global design talent.
India is capitalizing on its geopolitical influence to position itself as a vital partner for the technological ambitions of countries like the US, which are seeking to diversify their supply chains away from China. The disruptions caused by China’s lockdowns have spurred companies and governments to explore alternative production sources, with India presenting itself as a democratic and trustworthy alternative tech hub.
With the recent Cabinet approvals for setting up three semiconductor plants, including a mega fab by the Tata Group, at an investment of Rs 1.26 lakh crore, India is poised to become a significant player in chip manufacturing. Vaishnaw emphasized the importance of having a semiconductor supply chain within the country to complement India’s strong design capabilities and drive further value addition.
These semiconductor initiatives are expected to make India self-reliant, boost the economy, create jobs, and stimulate various industries, including automobiles, electric vehicles, electronics, defense, and telecommunications. The proposed semiconductor fabs will cater to diverse sectors such as power management, automotive, consumer electronics, and telecommunications.
The Indian government’s multi-billion dollar incentive scheme aims to attract both global and domestic chip makers to establish a production base in India, fostering local industry growth and linking India to the thriving global chip market. The global semiconductor shortage underscores the critical importance of fostering local semiconductor production to ensure the resilience of modern electronics supply chains.
