India Has Capability to Become Trusted Partner in Diversified Semiconductor Supply Chain: PM Modi

Success here would be more out of compulsion and an opportunity for India to position itself as a vital player in the global semiconductor supply chain. Recently, Prime Minister Narendra Modi reiterated that the country has the potential to become a trusted partner in this very strategic industry, with global manufacturers looking to diversify their supply chains and reduce dependency on single-source regions like East Asia.

Many factors are contributing to India’s rise in the semiconductor space:

1. Govt Initiatives: Govt. of India has announced many incentive schemes to promote semiconductor manufacturing in India. Production Linked Incentive scheme offers heavy incentives in order to attract semiconductor manufacturers to set up fabs and design units in India. All these are part of the larger Make in India and Atmanirbhar Bharat initiatives that aim at increasing local manufacturing and reducing reliance on imports.
2. Competent Workforce: India has an abundant and highly competent human resource in areas like engineering, IT, and electronics. Competent human capital adds to the long list of Indian benefits-a country’s location where every global company willing is ready to set up semiconductor design and research facilities. India has already emerged as a strong base in semiconductor design, with quite a few global giants having their R&D centers in Bangalore and Hyderabad.
3. Strategic Partnerships: India forms partnerships with countries on the frontline of semiconductor technology. The recent partnerships forged with the United States, Taiwan, Japan, and the European Union speak of the effort of India to integrate into the supply chain of the globe. For example, under the India-U.S. initiative on Critical and Emerging Technology, or iCET, the two governments have sought to strengthen cooperation in such areas as semiconductor research and manufacturing .
4. Diversified Supply Chain: The COVID-19 pandemic and geopolitical tensions have underlined some significant vulnerabilities within the semiconductor supply chain in global events. With a stable political environment, a transparent legal framework, and investment-friendly policies, India remains an ideal destination for firms planning to diversify their manufacturing operations away from concentrated hubs like China and Taiwan.
5. Increased Market Demand: The domestic market for semiconductors in India has grown substantially, with overall growth witnessed across the country’s electronics sector, with contributions from segments such as consumer electronics, smartphones, telecommunications, and automotive. The demand for semiconductors in India is likely to shoot up with the advent of 5G, electric vehicles, and other advanced computing; hence, it is an economic compulsion and opportunity for local production in the near future.

The enabling of these advantages is what enables India to try and play a crucial role in the global semiconductor ecosystem, as needed for not only its self-reliance but also the resilience of the global supply chain.