India commits $20 billion to enhance chip and smartphone production as Modi advocates for a domestic mobile brand.

      India has committed a total of ₹1.9 trillion ($19.7 billion) in incentives for domestic semiconductor and smartphone production, with ₹1.28 trillion ($13.3 billion) allocated for semiconductors, including areas like chip design, fabrication, research and development, and talent development, while ₹625 billion ($6.5 billion) is designated for mobile phone manufacturing. Prime Minister Modi has emphasized the need to establish an Indian mobile brand to compete with Chinese brands, according to Technology Minister Ashwini Vaishnaw.

      This initiative builds upon India's previous $10 billion program from 2021, which aimed to cover 50% of the costs for setting up semiconductor projects, successfully attracting companies like Micron Technology and the Tata Group to Gujarat. The first chip production in India has already commenced in Gujarat, and six semiconductor projects worth $14.7 billion have been approved in that state.

      India's push mirrors the US CHIPS and Science Act, which allocates $52 billion to enhance domestic chip production, though India's initiative is still in the early stages with only a few significant projects progressing. Countries across the globe are striving to develop self-sufficient chip industries to satisfy the growing demand in sectors such as AI, smartphones, automobiles, and household appliances. In contrast, China supports its chip industry with substantial state-backed investments.

      India aims to attract leading chip manufacturers by leveraging its engineering talent, design capabilities, and providing subsidies, similar to the approach that successfully brought Apple’s iPhone production to the country. Currently, Apple assembles 25% of its iPhones in India, facilitated by production-linked subsidies offered during the pandemic. The subsidies for smartphones will also aid Indian companies in a market largely governed by Chinese brands. This year, India's drive for technological self-sufficiency has gained momentum following the US's Anthropic export ban, highlighting the vulnerabilities of relying on foreign infrastructure. This $20 billion investment supports a strategy that encompasses everything from raw silicon to consumer devices and sovereign AI.