India Bets ₹76,000 Crore to Join Global Chip Race
India has been making significant strides in becoming a major player in the global semiconductor industry. With a substantial investment of ₹76,000 crore, the ‘Semicon India’ initiative aims to establish the country as a prominent hub for chip manufacturing. Backed by state policies, industry investments, and a growing talent pool, India is poised to capture a significant share of the global chip market, which is expected to touch $103 billion by 2030.
A Growing Industry
The Indian semiconductor industry has been growing rapidly over the years, driven by increasing demand from various sectors such as artificial intelligence (AI), 5G, and electric vehicles (EVs). According to a report by the Indian Semiconductor Association (ISA), the industry has already attracted over $20 billion in investments, with major players like Intel, Samsung, and Qualcomm setting up shop in the country.
The growth of the industry can be attributed to the government’s initiatives to promote the sector. In 2020, the Indian government launched the ‘Semicon India’ initiative, which aims to create a robust ecosystem for chip design, development, and manufacturing. The initiative focuses on developing indigenous capabilities, attracting global players, and promoting exports.
State Policies
The Indian government has been actively promoting the semiconductor industry through various policies and incentives. For instance, the government has announced a 15-year tax holiday for companies setting up semiconductor manufacturing units in the country. Additionally, the government has also waived off the goods and services tax (GST) on the import of semiconductors, making it more attractive for companies to invest in India.
States like Andhra Pradesh, Telangana, and Maharashtra have also been actively promoting the sector by offering various incentives, including subsidies, tax breaks, and single-window clearances. For instance, Andhra Pradesh has set up a dedicated semiconductor zone, which offers a range of facilities, including land, power, and water.
Talent Pool
India has a large pool of skilled engineers and technicians who are well-versed in semiconductor design and manufacturing. The country has a strong ecosystem of engineering colleges and research institutions, which produce a large number of engineering graduates every year. This talent pool has been a major draw for global companies looking to set up shop in India.
Manufacturing Growth
India has been making significant strides in manufacturing, driven by the government’s ‘Make in India’ initiative. The country has attracted several global companies to set up manufacturing units, including those in the semiconductor sector. For instance, Intel has set up a $10 billion manufacturing unit in Andhra Pradesh, while Samsung has invested heavily in its chip manufacturing unit in Noida.
The country’s manufacturing growth has also been driven by the growth of the automotive sector. With the increasing adoption of EVs, the demand for advanced semiconductors has been growing rapidly. India is well-positioned to capture a significant share of this growing market.
Rising Global Interest
Global companies are increasingly looking at India as a preferred destination for chip manufacturing. The country’s strategic location, large talent pool, and favorable business environment make it an attractive option for companies looking to expand their operations.
In recent years, several global companies have announced plans to set up chip manufacturing units in India. For instance, Taiwan-based company, Foxconn, has announced plans to set up a $5 billion chip manufacturing unit in Andhra Pradesh, while the US-based company, Texas Instruments, has set up a $30 billion manufacturing unit in Bengaluru.
Conclusion
India’s bet of ₹76,000 crore on the semiconductor industry is expected to pay rich dividends in the coming years. With a strong talent pool, manufacturing growth, and rising global interest, the country is poised to capture a significant share of the global chip market. As the industry continues to grow, India is likely to emerge as a major player in the global semiconductor landscape.
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