India's chip plans gain momentum with $21 billion proposals

Indian government is faced with a significant decision as it evaluates $21 billion worth of semiconductor proposals, including a $9 billion plan by Israel’s Tower Semiconductor Ltd. and an $8 billion proposal by India’s Tata Group.

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These projects, aimed at bolstering India’s semiconductor manufacturing capabilities, are part of Prime Minister Narendra Modi’s strategy to position the country as a global manufacturing hub and reduce dependence on costly imports. Under India’s chipmaking incentive plan, the government would bear half the cost of approved projects, signalling a substantial investment in the semiconductor sector.

Semiconductors have become a critical geopolitical battleground, with countries like the US, Japan, and China heavily investing in domestic capabilities. Modi’s initiative aligns with his broader vision to modernize India’s infrastructure and attract international chipmakers to the country. The semiconductor fund has already facilitated projects like Micron Technology Inc.’s assembly and testing facility in Gujarat, demonstrating India’s commitment to fostering a conducive environment for tech investments.