(July 15): India pledged a further 1.28 trillion rupees (RM54 billion) to boost domestic chipmaking, advancing its ambitious bid to become a global manufacturing hub.

The new semiconductor incentives are part of broader tech subsidies offered by the government as it seeks to attract more research, development and assembly into the country. India Prime Minister Narendra Modi’s cabinet also approved a new 625 billion rupee plan to bolster local mobile-phone making, Technology Minister Ashwini Vaishnaw told reporters in New Delhi on Wednesday.

The chip initiative will build on India’s previous US$10 billion (RM40.77 billion) programme from 2021, which offered to bear half the cost of setting up semiconductor projects. That effort helped kickstart India’s chip journey, drawing companies like US memory maker Micron Technology Inc and salt-to-software conglomerate Tata Group to the western Gujarat state.

The new incentives are aimed at areas such as chip designing, fabrication of machines, and research and development as well as creating talent, Vaishnaw said.

Modi is trying to bolster India’s chip campaign, which is in early stages with a handful of major projects under way. Governments around the world are ramping up support for their chip industries to become more self-sustaining and fulfil rising demand from developers of everything from AI and smartphones to cars and appliances.

India’s push, though nascent, is similar to the US$52 billion US Chips and Science Act that funds local chipmaking capacity. In China, authorities provide funding for chip firms in part through giant investment vehicles that back key companies across the ecosystem.

India is hoping to woo major chipmakers to the world’s most populous country with its engineering and design talent as well as subsidies, in much the same way it’s helped Apple Inc expand in the region. The US tech giant now assembles 25% of its iPhones in the South Asian nation.

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