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Will India’s New Semiconductor Policy yield any Results – I don’t think so

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Videocon, Reliance to set up Chip Manufacturing Plants in India

India is totally dependent on imports for its technology hardware needs, as the country has almost no semiconductor fabs or even electronic assembly factories. The country has been trying to promote solar and semiconductor industries through a number of subsidies for a long time. However, these initiatives have not resulted in any big semiconductor fab and even the small number of solar manufactures are dying in the face of a flood of cheap solar panel imports. The reason is that Indian policy makers lack both commitment and vision about the electronics industry in India. Despite having a huge technological talent pool, India has not been able to take advantage. The country is trying to revive the industry again through new sops and incentives. It has appointed a “top consultant” Accenture (more money down the drain) to help it formulate a policy.

Read about Telecom Companies in India.

Semiconductor giants like Freescale and others had evinced an interest in setting up a fab in India last time but nothing came out of it. Now MNCs have even stopped showing interest in setting up a factory, let alone actually invest to set up something. India is projected to import a gargantuan $200 billion in tech hardware by 2020. This has made even India’s useless politicians sit up and take notice. Boosting semiconductor manufacturing should not be very hard. Even small countries like Taiwan and South Korea have a huge industry. India can not only give tax and duty subsidies but also make it mandatory to use domestic semiconductor components. Domestic conglomerates like Videocon and Reliance are willing to invest billions of dollars if the policy environment is right. India should go all out to ensure that these plants come up. Otherwise the country will become dependent on others for technology as well as energy.

Read on GWI Mobile Phone Companies in India.


Home-grown electronics brand Videocon and Reliance Industries are ready to set up chip manufacturing plants.In proposals sent to the Government for setting up semiconductor fabrication plants, the two companies have offered to invest some Rs 25,000 crore on the condition that the Government provides incentives.

Though Reliance declined to comment, industry sources said the Mukesh Ambani firm was looking to invest close to Rs 18,000 crore in the project. The company has sought subsidy worth Rs 4,000 crore. The plant is likely to come up in Jamanagar SEZ or Navi Mumbai if the Government accepts the proposal.


Semiconductor fabrication is essential to promote local manufacture of electronic items. From smartphones to television to cars, every thing electronic has an in-built chipset that controls its operation. Globally, chipset market is dominated by Intel, Qualcomm, AMD and Texas Instruments. According to the Department of Electronics and Information Technology, the demand for electronics hardware in the country is projected to increase from $45 billion in 2009 to $400 billion by 2020.

Recently, the Finance Ministry announced zero customs duty on plant and machinery for semiconductor facilities. Minister for Communications and Information Technology Kapil Sibal had on Monday said the government had received two proposals for semiconductor manufacturing plants but did not name the companies.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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