India to lead global chip value chain with friendly govt policies: US report

Global competition for chip investment is fierce and India is set to expand its role in the semiconductor value chain with supportive government policies, a pilot visa programme and an industry-ready workforce, among others, a report under the US-India Initiative on Critical and Emerging Technology (iCET) said on Wednesday.

The report recommended exploring work to advance US-India cooperation on semiconductors through a partnership under the CHIPS for America International Technology Security and Innovation Fund (ITSI) and create a pilot visa programme to facilitate the circulation of skilled workers between the US and India, as a potential deliverable of the iCET.

It also suggested establishing cross-sector partnerships with higher-education institutions to grow India’s semiconductor-ready workforce, and facilitate robust and ongoing consultation with semiconductor industry stakeholders.

US President Joe Biden and Prime Minister Narendra Modi announced the iCET in May 2022 to elevate and expand the strategic technology partnership and defense industrial cooperation between the governments, businesses and academic institutions of the two countries.

The new report, authored by Washington-based non-profit organisation Information Technology and Innovation Foundation (ITIF), evaluated India’s existing semiconductor ecosystem and policy frameworks and offered recommendations to facilitate longer-term strategic development of complementary semiconductor ecosystems in the US and India.

The report, titled “Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains,” was commissioned by the Semiconductor Industry Association (SIA) and the India Electronics and Semiconductor Association (IESA) through the iCET to inform government efforts to deepen commercial ties in this strategic sector.

“This is an exciting moment in history for the semiconductor industry and for strategic cooperation between the US and India,” said John Neuffer, SIA president and CEO.

“While global competition for semiconductor investment is fierce, India’s value proposition is strong, and I’m confident it can grow even stronger with the right mix of government policies,” Neuffer added.

The report also recommended exploring work to advance policy reforms to lower the cost of doing business for semiconductor companies in India, including offering tax breaks to chip companies, reducing customs administration burdens and expediting clearance times for goods entering the country.

“Given its rapidly expanding domestic market, a well-developed design ecosystem, supportive government policies, and concerted industry collaboration to tap global markets, the present juncture presents a unique opportunity for the establishment of semiconductor manufacturing in India,” said Ashok Chandak, president of IESA.