India Announces New Semiconductor Incentives
India's Prime Minister Narendra Modi has announced new incentives and partnerships aimed at achieving self-reliance in semiconductor manufacturing. The initiative is designed to cultivate a domestic chip ecosystem within the country. This policy push further diversifies the global geography of advanced manufacturing as nations compete to secure critical technology production.
- The incentive program, known as the Programme for Development of Semiconductors and Display Manufacturing Ecosystem, has a total budget of INR 760 billion (approximately $10 billion). As of late 2025, the India Semiconductor Mission (ISM) has approved 10 projects with a total investment of about INR 1.6 trillion. - Financial incentives from the central government include fiscal support of up to 50% of the project cost for setting up semiconductor fabs and display fabs. State governments offer additional incentives such as capital subsidies, land assistance, and reduced power tariffs. - U.S.-based Micron Technology is building a $2.75 billion semiconductor assembly and test facility in Sanand, Gujarat, which is expected to begin commercial production by the end of February 2026. The project is anticipated to create 5,000 direct and 15,000 indirect jobs. - Tata Electronics is constructing India's first semiconductor fabrication facility in Dholera, Gujarat, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC) at an investment of INR 91,000 crore (around $11 billion). The facility will have a manufacturing capacity of up to 50,000 wafers per month, focusing on chips for applications like power management, display drivers, and microcontrollers. - In addition to the Dholera fab, Tata Group is also building an outsourced semiconductor assembly and test (OSAT) facility in Jagiroad, Assam, with an investment of approximately INR 27,000 crore (around $3.6 billion). - These initiatives are part of a broader global trend among nations to de-risk and diversify the semiconductor supply chain, which is currently heavily concentrated in East Asia. Taiwan, for instance, manufactures approximately 90% of the world's most advanced logic chips. - The Design Linked Incentive (DLI) scheme is another key component of the policy, aimed at fostering a domestic ecosystem for fabless chip design by offering financial incentives and design infrastructure support to local companies and startups.
