India plans a $11 billion fund to boost domestic chipmaking

India is reportedly doubling down on its semiconductor efforts by planning a new multi-billion-dollar fund to support the growth. Semiconductors are a crucial component that powers several electronic products, including smartphones, laptops, cars, defence systems, and AI servers.

The Indian government is planning to create a whopping $11 billion fund, which would be used to encourage companies and provide subsidies to build chip factories, develop semiconductor technology, and strengthen the local chip supply chain, according to a Bloomberg report. Although the plans are under discussion and are yet to be finalised.

India is joining a global race to meet the rising demand for powering AI systems, smartphones, cars, and consumer appliances. As other nations around the world are increasing efforts to support semiconductor industries and reduce import dependency, India is just getting started. 

The move also supports Prime Minister Narendra Modi’s vision to accelerate India’s chip-making. In addition, India's Union Minister for Electronics and IT, Ashwini Vaishnaw, also shows encouragement to make India a major global semiconductor hub by 2030

Now, India's strategy for attracting chipmakers relies on engineering talent, design expertise, and government subsidies. Due to these incentives, Apple now assembles about 25% of its iPhones in India. 

The government plans to do the same for semiconductor manufacturing to increase exports, strengthen domestic manufacturing, and build a robust industrial ecosystem.

 It simply plans to expand India’s $10 billion chip incentive program, which was launched in 2021. Under the program, the government offered to cover up to 50% of the cost for chip manufacturing facilities. 

This attracted companies such as Micron Technology and Foxconn Technology Group. In addition, it also encouraged the Tata Group to build a semiconductor factory in Gujarat.