India to launch $11B fund to boost chipmaking
What's the story
India is gearing up to launch a massive ₹1 trillion ($10.8 billion) fund aimed at boosting domestic chipmaking. The move comes as part of the country's ambitious plan to become a global manufacturing hub. The fund will provide subsidies for chip design projects, manufacturing equipment, and supply chain development. It is likely to be launched in two or three months, according to a Bloomberg report.
Strategic initiative
India's chip campaign
Prime Minister Narendra Modi is pushing to fast-track India's chip campaign, which is still in its early stages with only a few major projects. The global trend sees governments ramping up support for their chip industries to become more self-sustaining and meet the rising demand from developers of AI, smartphones, cars, and appliances. India's effort is on a smaller scale but similar to the $52 billion US Chips and Science Act that funds local chipmaking capacity.
Global competition
Attracting chipmakers to India
India is looking to attract major chipmakers with its engineering, design talent, and subsidies. This strategy has already helped Apple expand in the region, with the US giant now assembling 25% of iPhones in India. The new semiconductor incentives will be tied with other smartphone and component subsidies that the federal government offers to boost domestic manufacturing and exports.
Progress report
Initiative builds on India's $10 billion incentive program
The new initiative builds on India's $10 billion incentive program from 2021, which promised to bear half the cost of setting up chip projects. This effort has already drawn companies like US memory maker Micron Technology Inc., which is setting up an assembly facility in Gujarat. Tata Group is also building a semiconductor fabrication plant and a separate chip packaging unit in Gujarat as part of these government incentives.