The government of India would provide $1 billion in capital to chip makers to develop development plants in the country to support India’s increasingly rising ‘Make-in-India’ initiative. This latest project aims to broaden the mobile market in India and to improve the supply chain for electronics.
Two officials said that the semiconductor business that establishes production facilities in the country aims to expand on its mobile assembly market and improve its supply chain.
The ‘Make in India’ initiative by Prime Minister Narendra Modi has contributed to making India the second largest telecom company in the world following China. New Delhi believes that chip companies should develop themselves in the region.
“Each company which establishes chip manufacturing units will be given cash incentives of over $1 billion by the government,” a senior government official told Reuters, refusing to be identified because the government was not able to communicate with the media.
A secondary government source, who also refused to be named, said how to include the cash benefits has yet to be determined, and the government asked the industry for input.
Worldwide governments are financing the building of semiconductor plants as a lack of chips hamper the automotive and electronics sectors and undermine Taiwan’s worldwide reliance on suppliers.
India also needs to build stable electronics and telecommunications providers to cuts China’s reliance after last year’s border crossings.
Locally manufactured chips are designed to be ‘trustworthy sources.’ The first source said they can be found in devices that vary from CCTV to 5G appliances. However, the sources did not tell whether certain semi-finishing companies showed interest in the establishment of units in India. The Indian Ministry of Technology didn’t respond to a request for comment.
India has provided numerous advantages and incentives for MNC to build production units in the country for the dis-initiated. As a result, we have seen big businesses including Apple, Amazon, Ola, and Tesla as part of India.
The Government now wants semiconductor giants like Qualcomm and MediaTek to build production facilities in India in the middle of the continuing chip shortage. Reuters’ article calls for the publication of two unnamed officials from the department.
Previous Failures To Bring Manufacturing Plants To India
India has attempted to squeeze semiconductor players before, but companies have been discouraged by India’s wobbly infrastructure, unreliable power, bureaucracy, and bad planning
After the smartphone industry’s growth, industry expert’s claim, the government’s latest drive to recruit chip makers is probably more effective.
Also, Indian conglomerates, such as the Tata Group, have shown interest in moving to high-tech manufacturing and electronics.
India invited chipmakers in December to “show their concern” in the establishment of manufacturing units within the country or acquisitions by the Indian business or consortium of such manufacturing units abroad.
Given the extent of market demands, the government spokesperson said that the last date for submission of this expression of interest was prolonged to the end of March, 31 January.
Operators from the Department of Technology of India met earlier this year with managers of the Indian Automobile Manufacturers Association (SIAM). Three auto industry sources reported on the condition of anonymity to determine the demand for chips from car manufacturers.
According to a source from the auto industry, the government projected that it would cost approximately $5-USD 7 billion to set up a chip manufacturing plant for India, which would take two to three years after all approvals.
The source added that New Delhi is prepared to give discounts to businesses, including customs duty exemptions, R&D, and interest-free credits.