India's chip mission may swell to $20 bn

Meity proposes doubling in 2nd phase; Final nod likely by Dec

- Shouvik Das & Jatin Grover

India's ambition to be a semiconductor superpower is poised to take a leap, with the Centre working on a $20 billion package to propel its chip and fab ecosystem.

The Union ministry of electronics and IT (Meity) has submitted the incentives proposal to the finance ministry, five people aware of the matter said, doubling the outlay for the first phase of the India Semiconductor Mission (ISM). Approval from the finance ministry is expected as early as October, after which the proposal will go to the Union Cabinet. The final clearance is likely before the close of 2025 when the first phase ends.

Meity is currently preparing a dossier that will outline the performance and returns of ISM's first phase, and compare them with similar schemes in other countries, three of the five people confirmed.

"The finance ministry had asked for an economic projection document from Meity, seeking an understanding of how ISM's first tranche's returns will play out, and how India's shaping up in comparison with other nations, especially the US, whose chip incentives are larger but market dynamics are undeniably trickier," one of the people cited above said.

The US Chips Act provides over $52 billion in subsidies and tax credits for the semiconductor sector, while the EU's Chips Act is mobilizing more than €43 billion in public and private investment.