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

      India has committed a total of $19.7 billion, which includes $13.3 billion for semiconductors and $6.5 billion for smartphones. Prime Minister Modi aims to establish an Indian mobile brand to compete with Chinese dominance. On Wednesday, India announced an incentive package amounting to 1.9 trillion rupees ($19.7 billion) to boost domestic production of chips and smartphones. The cabinet approved 1.28 trillion rupees ($13.3 billion) for the semiconductor sector, which encompasses chip design, machine fabrication, research and development, and talent cultivation, along with an additional 625 billion rupees ($6.5 billion) for mobile phone manufacturing. “The Prime Minister has clearly instructed us to create an Indian mobile brand,” stated Technology Minister Ashwini Vaishnaw in New Delhi.

      This new initiative builds upon India's $10 billion program launched in 2021, which provided to cover half the expenses associated with establishing semiconductor projects. That initiative attracted companies like Micron Technology and the Tata Group to western Gujarat state, where India's initial chip production has already commenced, and six semiconductor projects totaling $14.7 billion have received approval.

      India's strategy is similar to the $52 billion US CHIPS and Science Act, which aims to boost domestic chip production. However, India’s initiative is still in the early phases, with only a few significant projects currently in progress. Governments around the world are racing to develop self-sufficient chip industries to satisfy the growing demand from sectors such as AI, smartphones, vehicles, and consumer appliances. China's chip industry is supported by substantial state-backed investments.

      India is working to draw major chip manufacturers by leveraging its engineering workforce, design expertise, and subsidies, replicating the approach it took to lure Apple’s iPhone assembly to the country. Currently, Apple assembles 25% of its iPhones in India, facilitated by production-linked subsidies offered during the pandemic. Additionally, the smartphone subsidies will bolster mobile production by Indian companies in a market largely controlled by Chinese brands. India's broader pursuit of technological self-reliance has gained momentum this year, particularly after the US Anthropic export ban highlighted the risks of reliance on foreign infrastructure. This combined $20 billion commitment supports a strategy that spans from raw silicon to consumer devices and sovereign AI.