New Delhi: The Indian government is working on a $20 billion incentive scheme to attract semiconductor manufacturers, both domestic and global, as part of its ongoing effort to strengthen its foothold in the chip industry. The Ministry of Electronics and Information Technology (MeitY) has placed the proposal before the finance ministry, and a Cabinet decision is expected by the end of 2025, coinciding with the conclusion of the first phase of the India Semiconductor Mission (ISM).
According to officials, MeitY is preparing a detailed evaluation of ISM’s initial outcomes and comparing them against similar programmes globally. The finance ministry has sought economic projections to understand the returns generated so far and to assess India’s competitiveness in relation to other countries.
Globally, semiconductor incentives have grown into a policy priority. The United States has committed over $52 billion under the Chips Act, while the European Union has earmarked more than €43 billion in public and private capital. Countries like China, Japan, and South Korea have also introduced large-scale support measures, offering tax breaks, subsidies, and direct financial assistance.
India’s financial support is expected to remain smaller in comparison, but officials highlight that the government aims to leverage policy predictability and regulatory stability as factors to attract long-term investment. The proposed scheme reflects the government’s attempt to balance fiscal limits with the need to remain relevant in a sector shaped by heavy subsidies and global competition.
The Cabinet’s upcoming decision will shape the direction of India’s semiconductor strategy in the next phase, determining whether the country can position itself more firmly within global chip supply chains.
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