Talking about India’s plans to become a bigger player in the vital semiconductor space, Union Home Minister Amit Shah on Thursday emphasised that India will soon not only become self-reliant in the semiconductor industry but also begin exporting semiconductors.
Speaking at the ‘Abhyudaya Madhya Pradesh Growth Summit’ about the overall performance of the Indian economy, the Home Minister said, “Our forex reserves have crossed the record level of seven hundred billion dollars.”
“India has made a spectacular entry into the semiconductor industry. Soon, we will not only become self-reliant in the semiconductor sector, but also start exporting semiconductors,” he added.
Rise in forex reserves
Shah’s remarks come against the backdrop of rise in India’s forex reserves. India’s foreign exchange reserves rose to USD 702.96 billion in the week ending September 12, according to the Reserve Bank of India’s latest Weekly Statistical Supplement.
This marked the third consecutive weekly increase, crossing the psychologically important USD 700 billion level.
Why is India focusing on semiconductors?
The home minister’s announcement comes at an important time as the global giants have staged efforts to strengthen their standing in the semiconductor and AI space. Which has led to the creation of larger tech infrastructure across countries such as Singapore and the United States of America.
Semiconductors form the backbone of the modern electronics industry and are used in the development of smartphones, laptops, consumer electronics and Automobiles (especially EVs). Beside the electronics industry, semiconductors also play a huge role in Defence, space and telecom sectors.
India currently imports nearly all advanced chips, making supply chains vulnerable—as seen during the global chip shortage after Covid-19. To battle the chip shortage, the central government announced the India Semiconductor Mission (ISM) in 2021 with a 76,000 crore package.
Focus areas for the mission include Chip fabrication (fabs), Display manufacturing, OSAT/ATMP (assembly, testing, packaging) and creating a conducive semiconductor design ecosystem. Large projects announced by the government as part of the mission so far include fabs and packaging units in Gujarat, Assam and Tamil Nadu, with participation from global and domestic players.