India plans new $11 billion fund to support local chipmaking business

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India plans to unveil a more than 1 trillion rupee ($10.8 billion) fund aimed at bolstering domestic chipmaking, advancing its ambitious bid to become a global manufacturing hub. The fund, which will provide subsidies for chip design projects, manufacturing equipment and supply chain development, may be launched in two to three months, people familiar with the matter said, asking not to be named as the plan isn’t yet public. The plan is still under discussion and may change. Prime Minister Narendra Modi is trying to accelerate India’s chip campaign, which is in early stages with just a handful of major projects underway. Governments around the world are ramping up support for their chip industries to become more self-sustaining and fulfil rising demand from developers of everything from AI and smartphones to cars and appliances. India’s push, though smaller in scale, is similar to the $52 billion US Chips and Science Act that funds local chipmaking capacity. In China, authorities provide funding for chip firms in part through giant investment vehicles that invest in key companies across the ecosystem. India is hoping to woo major chipmakers to the world’s most populous country with its engineering and design talent as well as subsidies in much the same way it’s helped Apple Inc. expand in the region. The US giant now assembles 25% of iPhones in the South Asian nation.Producers by 2032 The new semiconductor incentives will tie in with other smartphone and component subsidies that the federal government offers to boost domestic manufacturing and exports, the people said. India’s tech ministry, in charge of the fund, didn’t respond to a request for comment. The initiative would build on India’s $10 billion incentive programme from 2021, which offered to bear half the cost of setting up chip projects. That effort helped kickstart India’s chip journey, drawing companies like US memory maker Micron Technology Inc., which is establishing an assembly facility in Western Gujarat state. Indian salt-to-software conglomerate Tata Group is also building a semiconductor fabrication plant in Modi’s home state of Gujarat, along with a separate chip packaging unit. Several other ventures tied to chip manufacturing and packaging, including Foxconn Technology Group’s test and assembly facility, have also been announced as part of the government incentive programme. While In...

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