India plans to launch a fund worth more than ₹1 lakh crore ($10.8 billion) to support domestic semiconductor development, people familiar with the matter told Bloomberg.
The fund will reportedly offer subsidies for chip design projects, manufacturing equipment, and supply chain development as India seeks to build a stronger local semiconductor industry.
The initiative may launch within two to three months, the report added. The plan remains under discussion, and officials may still change details before the announcement.
While the country remains in the early stages of chip manufacturing, with only a few major projects underway, this marks an effort to fund the India Semiconductor Mission (ISM) 2.0. The first phase currently stands at a corpus of ₹76,000 crore (~$10 billion).
Governments worldwide have increased support for chip production as demand rises from industries such as AI, smartphones, cars and consumer electronics.
The United States passed the $53 billion Chips and Science Act in 2022 to expand local semiconductor production. Key provisions were $39 billion in manufacturing incentives for facilities and almost $13 billion for research and development. Major awards have gone to Intel, TSMC, and Micron to build fabs in the US.
China also funds chip companies through large state-backed investment vehicles that support firms across the semiconductor ecosystem. It launched the third phase (2024–2025) of its National Integrated Circuit Industry Investment Fund, boasting over $47.5 billion in capital. It targets AI chips, lithography, and manufacturing, and acts as a counter to US chip restrictions against China.
Meanwhile, India hopes to attract global semiconductor companies through subsidies and with its engineering and design talent. After starting manufacturing in India in 2017, Apple now assembles about 25% of its iPhones in the country, according to Bloomberg.
The new semiconductor fund would also complement existing government subsidy programmes that support smartphone and component manufacturing. Officials and smartphone companies are discussing another round of incentives as the current programme expires on March 31, the report added.
India has attracted investments from companies including Micron (building a semiconductor assembly (OSAT) facility in Sanand, Gujarat) and Tata Electronics, which, in partnership with PSMC, Taiwan, is constructing a chip fabrication plant in Dholera, Gujarat.
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