Indian government to provide 1 billion USD in cash to attract chip manufacturers

Relevant sources revealed that India will provide more than $1 billion in cash to every company that comes to the country to set up a manufacturing department. In order to seek the development of its smartphone assembly industry and strengthen its electronic product supply chain.

The “Made in India” initiated by the Prime Minister of India has helped the country become the world’s second-largest producer of mobile phones after China. New Delhi believes that it is time to attract chip manufacturing companies to build factories there.

A senior government official revealed: “The government will provide more than one billion U.S. dollars in cash rewards to each company that sets up a chip manufacturing department.” Another unnamed government source said that how these cash rewards will be distributed is still unclear. The government has solicited opinions from the industry.

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Governments around the world are subsidizing the construction of semiconductor factories, because the shortage of chips plagues the automotive and electronics industries, and highlights the global dependence on Taiwan’s supply.

India also hopes to establish reliable suppliers for its electronics and telecommunications industries to reduce its dependence on China after the border conflict last year. But the source did not specify which semiconductor companies are interested in setting up factories in India.

India has previously tried to attract semiconductor companies, but India’s unstable infrastructure, unstable power supply, bureaucracy, and poor planning will hinder the company’s development. Industry insiders said that with the success of the Indian smartphone industry, the government’s new round of efforts to attract chip manufacturers is more likely to succeed.

According to sources in the automotive industry, earlier this year, officials from the Ministry of Technology of India met with senior executives from the Association of Indian Automobile Manufacturers (SIAM) to assess the demand for chips from automakers.

The Indian government estimates that it will take approximately US$5-7 billion to establish a chip manufacturing department in India, and it will take 2-3 years after all approvals are in place. The source added that New Delhi is willing to provide concessions to companies, including exemptions from tariffs, research and development expenses and interest-free loans.

(Via)