India reportedly plans $10.8b fund to boost domestic chipmaking

India plans to unveil a more than 1 trillion rupees (US$10.8 billion) fund to boost domestic chipmaking and may launch it within two to three months, people familiar with the matter said.

People familiar with the matter said the fund would provide subsidies for chip design projects, manufacturing equipment, and supply chain development.

The plan is still under discussion and could change.

New Delhi aims to develop chipmaking capabilities comparable with leading producers by 2032, Ashwini Vaishnaw, the technology minister, said in November.

The initiative builds on a 2021 US$10 billion incentive program that offered to cover half the cost of setting up semiconductor projects and drew companies such as Micron Technology and Foxconn, which have announced projects under the scheme.

Tata Group is also building a fabrication plant in Gujarat and a separate chip packaging unit, and several chip packaging and assembly projects have been announced.

The plan is smaller in scale than the US$52 billion CHIPS and Science Act and reflects wider global efforts to strengthen local chip supply chains.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

India’s next chip fund aims past factories and into the supply chain

The first US$10 billion program subsidized up to 50% of project costs for manufacturing facilities, drawing more than 1.6 trillion rupees (about US$18–19 billion) for fabs (chip fabrication plants) and packaging plants 1.
The next phase, labeled “ISM 2.0” (a proposed second phase of the India Semiconductor Mission, the government program to grow the chip industry), plans to build domestic suppliers of semiconductor equipment and materials, plus fund the design of Indian “full stack” semiconductor intellectual property meaning more chip technology is developed locally rather than sourced from abroad 2.
Design support has already started through programs backing microprocessors like the DHRUV64, built on the open-source RISC-V (an open standard for processor design) architecture to foster local innovation 2.

Execution risks could limit the impact of a larger chip budget

A planned US$10.8 billion expansion could raise operational risk if oversight capacity does not keep pace.
The India Semiconductor Mission (ISM), which manages these multi-billion dollar projects, reportedly runs with a team of 18 people 3.
That staffing level may slow verification and payouts for projects such as Tata Electronics’ semiconductor fabrication plant in Dholera, Gujarat, planned at up to 910 billion rupees (about US$11 billion) 3, 4.
Analysts cite missing detailed, time-bound milestones, which can weaken accountability and make taxpayer returns harder to track 3.