The Union Cabinet, led by PM Modi, has approved a Memorandum of Cooperation (MoC) between India and Japan on the Semiconductor Supply Chain Partnership. This landmark agreement, signed in July 2023, seeks to enhance the semiconductor supply chain, recognising its pivotal role in the advancement of industries and digital technologies.

The MoC is set to come into effect from the date of its signing and will remain in force for five years. It reflects a shared commitment by both governments to promote bilateral cooperation through Government-to-Government (G2G) and Business-to-Business (B2B) channels, aiming to bolster the resilience of the semiconductor supply chain while leveraging the strengths of both nations.

It will also help create employment opportunities, particularly in the Information Technology sector.

This move is in line with India’s efforts to establish a conducive environment for electronics manufacturing and foster the development of a robust and sustainable semiconductor and display ecosystem.

Previously, the Ministry of Electronics and Information Technology (MeitY) had initiated the ‘Programme for Development of Semiconductor and Display Manufacturing Ecosystem in India’ to provide fiscal support for the establishment of various semiconductor facilities.

India is experiencing a surge in semiconductor investments from major players. US-based Microchip has unveiled a $300 million investment plan, while Micron is constructing a $2.75 billion semiconductor factory in Gujarat. Additionally, Foxconn’s $8 billion investment in India is expected to increase fivefold in the coming three years. These investments signify the growing interest in India’s semiconductor industry and its potential for substantial growth.

Recognising the importance of international cooperation, MeitY has actively engaged with counterpart organisations and agencies in various countries to promote bilateral cooperation and exchange of information, as well as to ensure supply chain resilience.

The $75 billion ‘India-Japan Digital Partnership’ (IJDP), launched during PM Modi’s visit to Japan in October 2018, aimed to broaden and deepen cooperation in the field of electronics. It is within this framework, along with the “India-Japan Industrial Competitiveness Partnership”, that the MoC on the Japan-India Semiconductor Supply Chain Partnership will further strengthen collaboration in the electronics ecosystem.