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India plans $11 billion push to strengthen semiconductor sector

India is preparing a new $11 billion fund to accelerate the growth of its semiconductor industry, as the government aims to expand domestic chip manufacturing and strengthen local supply chains. The initiative seeks to encourage semiconductor companies to establish manufacturing facilities in the country and advance technology development. The proposal is currently under discussion and has not been finalised.

Strengthening Domestic Chip Production

Semiconductors are critical components in smartphones, laptops, automobiles, defence systems, and artificial intelligence infrastructure. With global demand surging, countries worldwide are investing heavily in domestic semiconductor production to reduce reliance on imports and secure supply chains.

India’s planned fund would provide financial support to semiconductor companies for setting up chip factories, developing advanced technologies, and expanding the local supply chain. The initiative reflects the government’s broader strategy to position India as a major hub for technology manufacturing.

Prime Minister Narendra Modi has previously highlighted the importance of developing a domestic semiconductor ecosystem to support industrial and digital growth. Union Minister for Electronics and Information Technology Ashwini Vaishnaw has reiterated the goal of making India a significant semiconductor hub by 2030.

Building on Earlier Incentive Programmes

The $11 billion plan is expected to expand on India’s earlier $10 billion semiconductor incentive programme launched in 2021, which offered financial support covering up to 50% of semiconductor manufacturing project costs. That scheme attracted commitments from major companies, including Micron Technology and Foxconn.

In addition, the Tata Group has announced plans to establish a semiconductor manufacturing facility in Gujarat, highlighting private sector interest in the government-led push to develop the domestic chip industry.

The proposed fund is part of a larger effort to ensure India can compete in the global semiconductor market, attract investment, and reduce dependence on imported chips, supporting both economic growth and technological self-reliance.