The government think tank believes India should focus on semiconductor design, packaging, and supply-chain strengths instead of directly competing in advanced chip manufacturing.
Today, India imports roughly 90 to 95% of its semi conductors that it uses. As reported by NITI Ayog this much dependency can cause difficulty for the country in the future. The demand for the semiconductors is rising speedily and the report also highlighted that India should rethink its strategy.
The report also points out that India has spent around 150 billion dollars on the imports of semiconductors in the Fiscal Year 2017 and Fiscal Year 2025, if the current dynamics are carelessly being carried forward till 2035 the cost might touch 240 billion dollars.
In this NITI Ayog stated that India should not try to compete with the global semiconductors manufactures instead it should focus on how to strengthen areas such as semiconductor design, advanced packaging, system integration, and compound semiconductors.
Why is the demand suddenly growing?
The demand is rapidly increasing as there is a rapid expansion in data centres, electric vehicles (EV), and the shift to artificial intelligence “Chips have become increasingly important to national security and defence programmes,” the report notes.
Basically semiconductors are very important and since most of it is being imported so, any disturbance due to geopolitical tension or some trade restrictions it can hamper India’s semiconductor supply.
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NITI Aayog said they are aware of the practical challenges involved in building a domestic ecosystem and it will require long term planning but considering the fact that India has a great opportunity to reduce its dependance on the imports and start building itself in the global semiconductor industry.
This task will not be easy however, with accurate planning, investments, and partnerships it may lead us to the right direction. This way India can little by little reduce its dependency and grow more in this industry.
