India is poised to enter the high-stakes arena of semiconductor manufacturing within the next five years, leveraging its design prowess and offering $10 billion in incentives to attract manufacturers.

According to IT and Telecom Minister Ashwini Vaishnaw, India’s well-crafted policies are enticing manufacturers to establish new semiconductor fabrication plants (fabs) and invest in related sectors.

With ambitions to elevate its position in the manufacturing value chain, India aims to reduce the dominance of Taiwan, South Korea, and China in the semiconductor industry. The government’s incentives, totaling ₹76,000 crore, have already attracted major players such as Micron and Tata Group.

Vaishnaw highlighted India’s substantial pool of global design talent, noting the country’s potential to become a crucial partner in fulfilling the technological ambitions of the US and other Western economies seeking to diversify their supply chains away from China.

In response to disruptions caused by Beijing’s stringent lockdowns, which disrupted global chip supply chains, India is positioning itself as a democratic and reliable alternative technology hub to China.

Regarding timelines for India to emerge as a significant player in semiconductor manufacturing, Minister Vaishnaw expressed confidence that within the next five years, the country will achieve formidable status, supported by recent Cabinet approvals for three semiconductor plants. These include a mega fab by Tata Group, signaling India’s ambition to become a global powerhouse in chip manufacturing.

Vaishnaw emphasized the importance of establishing a semiconductor supply chain within India to bolster self-reliance, stimulate economic growth across various sectors, create jobs, and enhance livelihoods. The semiconductor industry’s ripple effect extends to diverse sectors such as automobiles, electric vehicles, electronics, defense, and power electronics, amplifying India’s industrial capabilities.

The approved semiconductor projects include Tata Electronics’ partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp to establish a fab in Gujarat, focusing on advanced technologies catering to multiple sectors. Additionally, Tata Group plans to build a semiconductor assembly and test facility in Assam, while CG Power, in collaboration with Renesas Electronics Corp and Stars Microelectronics, will set up a unit in Gujarat.

India’s incentivized approach seeks to attract both global and domestic chip makers to establish a production base in the country, tapping into the multi-billion dollar semiconductor market. Recognizing the critical role of sophisticated chips in modern electronics, India’s strategic initiatives aim to bridge local industry with the global chip market, fostering growth and resilience in the face of semiconductor shortages.