SEMICON India 2025: For chip push, PM makes reform pitch to investors

Modi’s reference to the next phase of the mission could signal the start of a second comprehensive incentive package to drive the country’s aspirations in the chip space, which it sees as a major economic driver. The PM also said that as part of the next incentives for designing chips in the country, the government would stress on creating intellectual property that could be accrued to India.

Under the first phase of the scheme, which was launched in 2021 with a financial outlay of Rs 76,000 crore, India has approved 10 semiconductor plants, including two fabrication facilities and eight packaging and testing facilities. The Indian Express had earlier reported that the next phase could be worth $15 billion, with incentives for capital goods and raw materials industry as well.

“The world trusts India, the world believes in India, and the world is ready to build the semiconductor future with India… India has reached here following the mantra of reform, perform and transform. In the coming times, we are going to start a new phase of next generation reforms. We are also working on the next phase of the India Semiconductor Mission,” Modi said.

“I would like to tell all the investors present here that we are ready to welcome you with an open heart. And if I say (it) in your language, the design is ready, the mask is aligned. Now is the time to execute with precision, and deliver at scale. Our policies are not short-term signals; they are long-term commitments. We will fulfill your every need. The day is not far when the whole world will say — Designed in India, Made in India, Trusted by the World,” he said.

“The success story of semiconductors in India is not limited to any one vertical or any one technology. We are creating a complete ecosystem, an ecosystem where designing, manufacturing, packaging and high-tech devices, everything is available right here in India. Our Semiconductor Mission is not limited to just one fab or one chip manufacturing. We are creating a semiconductor ecosystem that makes India self-reliant and globally competitive,” he said. “India is now moving beyond the backend to become a full-stack semiconductor nation. The day is not far when India’s smallest chip will drive the biggest change in the world. Our journey started late, but nothing can stop us now,” he said.

“There is a saying in the world of semiconductors, oil was black gold, but chips are digital diamonds… the power of the 21st century has been confined to a tiny chip… speed matters in semiconductors. The lesser the time from file to factory, the lesser the paperwork, the sooner the wafer work can start. Our government is working with this same approach. We have implemented the national single-window system. Through this, all the approvals from the Centre and the states are being received on a single platform… Today, semiconductor parks are being built across the country on a plug-and-play infrastructure model… Be it PLIs or design linked grants, India is offering end-to-end capabilities,” he said.

Citing India’s recent GDP numbers, Modi said the country was on course to soon become the third largest economy in the world. “A few days ago, the first quarter GDP numbers were released, and India’s growth was beyond everyone’s expectations. On one hand, when economies are under stress due to challenges emanating from economic selfishness, India is moving ahead, registering growth across sectors like manufacturing and agriculture,” he said. “The pace with which India is growing, is giving the industry and its citizens a new energy. With this direction of growth, India is guaranteed to soon become the world’s third largest economy,” he said.

Saying that the global semiconductor market is reaching $600 billion, and is set to cross $1 trillion in the next few years, he said: “With the speed at which India is progressing in the semiconductor sector, it is going to have a significant share in this $1 trillion market”.

The PM had earlier announced that the first commercial Made-in-India chip would be available in the market, and Murugappa Group’s CG Semi is expected to make the first chip from its pilot line.

Speaking to reporters, IT Minister Ashwini Vaishnaw said the industry has conveyed to the government that it sees India as a destination which respects intellectual property rights. “That trust has correlated into so many global capability centres (GCCs) and supply chain development,” he said.

Responding to a question from The Indian Express on the government’s vision for the second phase of the chip mission and whether it would continue to focus on assembly and testing plants, he said: “ISM 1.0 was the beginning. We have a significant learning curve. Now it is time to increase the scope of work which includes capital equipment… other parts that go into semiconductor manufacturing will be part of it as well.”

Asked if the recent thaw in India-China relations could translate into collaboration in the chip space, he said: “The world is good enough and all good things come through collaboration.”

Last month, the Union Cabinet cleared four new semiconductor assembly and testing plants under its India Semiconductor Mission, with a total financial outlay of Rs 4,594 crore. With these, the government is now offering financial incentives for the construction of a total of 10 chip-related factories, ranging from fabrication to assembly and testing operations. This includes the Tata-PSMC fab, being built at a cost of roughly $11 billion, along with assembly and testing plants by US-based Micron Technology, the Tatas, Murugappa Group’s CG Power, Kaynes Semicon and HCL-Foxconn.