Modi 3.0: Industry leaders are hopeful that India's semiconductor industry will advance rapidly.

For decades, India has aimed to become a leader in the semiconductor industry but has largely missed opportunities and lacked focus over the past seventy years. However, during Prime Minister Narendra Modi's second term, especially after the COVID-19 pandemic, the government made significant efforts to realize this goal. In December 2021, a semiconductor and display scheme worth Rs 76,000 crore was approved. Unlike previous attempts, this time the government took a strategic approach, rejecting proposals from large business houses that lacked a technology partner, recognizing the complexity of chip manufacturing compared to electronic assembly. With exit polls suggesting a likely third-term win for Prime Minister Modi, the industry anticipates accelerated growth in India's semiconductor sector.

Satya Gupta, President of the VLSI Society, noted that the early signs from the 2024 General Elections indicate a return of the NDA government under Modi's leadership. He emphasized the significance of the electronics and semiconductor industry in achieving the goal of a developed India by 2047, predicting it could contribute $3 trillion to the economy, with $2 trillion from domestic consumption and $1 trillion from exports, and create 100 million jobs by 2047. Key government figures, including the Prime Minister and External Affairs Minister S. Jaishankar, have highlighted the sector as crucial for the country's economic and strategic objectives.

Experts suggest that for India to become a developed nation by 2047, the next 25 years should focus on strengthening the existing electronics and semiconductor manufacturing infrastructure and making India a hub for electronics and semiconductor products. Anurag Awasthi, Vice President of the India Electronics & Semiconductor Association, mentioned the need for continued government support and policies, emphasizing a "Product Centric" focus in electronics and new approvals for semiconductor fabrication with various technologies. He highlighted the importance of converging manufacturing, supply chain aspects, and responsive logistics to establish India as a semiconductor and electronics hub.

Prabhu Ram, Head of the Industry Intelligence Group at CMR, emphasized the importance of attracting upstream players to strengthen the domestic electronics manufacturing value chain, enhancing the country's competitiveness. With the expected re-election of the Modi government, credible proposals for semiconductor fabs under the India Semiconductor Mission are anticipated. Building semiconductor fabs requires substantial investment and time, often taking 7-10 years to become profitable. Despite former central bank governor Raghuram Rajan's criticism of the semiconductor scheme, which had raised skepticism among global players, the continuation of the current government is expected to enhance incentives for India's industrial and manufacturing sectors.

Independent semiconductor analyst Arun Mampazhy stated that if the current government remains in power, it could allocate additional incentives for establishing more fabs, considering that only one fab has been approved so far. He suggested that another $10 billion or more might be allocated for this purpose. With companies like Sharp showing interest in investing in India, there is potential for one or two display fabs to be approved as well. Mampazhy also recommended not focusing solely on the 28nm technology node and considering proposals like that from Tower Semiconductor, noting the limited interest from global fabs in setting up in India.

Countries like India, the United States, and the European Union are prioritizing semiconductor manufacturing due to its critical importance, often referred to as the new oil of the future. Engaging in semiconductor production not only shapes a nation's future trajectory but also positions it significantly in global negotiations in the coming decades.