India to leverage $750 billion semiconductor Industry expansion

The $750 billion global semiconductor industry is set to double in size in the next 6-7 years, and India is uniquely positioned to take advantage of it, Ashwini Vaishnaw, Minister for Communications, Electronics & Information Technology said at the Business Standard summit, BS Manthan on Wednesday.

What is working in favour of India is an abundant workforce, access to green energy and a growing chemical manufacturing ecosystem, he said.

“A $1 trillion industry will require more than nine lakh talented professionals. Close to a-third of all talent in the semiconductor industry are in India. From conceptualizing a new chip to designing and validating it, and ensuring it is ready-to-fab, that entire value chain is in India,” the union minister said.

“We have also taken big strides in having clean energy. For our level of per capita income the world is amazed that we have close to 42 per cent of our power generation capacity in the green power. We have one of the largest chemical manufacturing ecosystems in the world in Dahej, Gujarat. There are very few countries with these kinds of competitive advantages,” he said.

The minister stressed India’s ambitions are backed by support from global industry. “I have met top executives from 45 different global semiconductor companies. Each one of them said the natural next destination will be India. They said given the challenges in the rest of the world, a move towards India is inevitable,” he said.

When asked about critics suggesting India should prioritise services over imitating other South East Asian economies and build manufacturing capabilities, Vaishnaw emphasised that, given India’s size, it is never a question of ‘either-or’ but what all can be done.

As the country has taken its first step of setting up a chip fabrication plant, the government believes India should not differentiate between chip designing and manufacturing. The country’s first major chip fabrication facility at Dholera in Gujarat, being set up by the Tatas, is expected to roll out chips by December 2026, Vaishnaw had said earlier in March. Two other plants in Gujarat’s Sanand and Morigaon in Assam are expected to assemble semiconductors.

The setting up of India’s first chip fabrication plant in Dholera was one of the most satisfying aspects of his tenure as a minister, he said.

But that does not mean that the focus on the manufacturing segment is coming at the cost of tech services. Vaishnaw was of the opinion that both were the government’s focus. “We will create a major policy framework for the GCCs which are set up here and build on that strength,” he said, adding that the focus of the government is equally on manufacturing as well as services because “both of them are huge employment opportunities”.

Hinting at a further policy push towards domestic manufacturing, Vaishnaw said the sector will be a major focus in what he referred to as the government’s next term.

“India will become a product nation, and many of these products will be coming from deep tech sectors, and will affect every citizen’s lives. Today manufacturing provides employment to about 3-crore people in our country. In the next five years, this will definitely double,” the minister said. Indian-designed and Made in India telecom radio equipment is now being deployed in the United States and Europe, he said.

No more safe harbour
On rising instances of global regulatory action against big tech, the minister said the entire context in which big tech, and especially social media platforms operate, has changed. “That construct of safe harbour is no more there. Just like in your newspaper, you are actually taking care to make sure that no fake news gets published, the same kind of responsibility has to be taken by social media platforms. That is a global consensus that is forming,” Vaishnaw said.

“All communication and digital ministers I have met in the past two-and-a-half years have expressed concerns on the impact of social media on their societies. The US has restricted access to social media platforms to children. That is going to come for sure,” the minister said.

Meanwhile, the government’s singular approach for the technology domain, from 6G to artificial intelligence, has been to establish India as a global thought leader, Vaishnaw said.

A case in point: The government has created a framework for the entire digital economy, based on four components, he said. “Two components are horizontal. The Digital Personal Data Protection Act, 2023 is a horizontal construct that affects every sector. This can be used across sectors, from financial services to healthcare. The second is telecom. It is today the gateway to all things digital. That’s why it was necessary to shift away from 1885 law to one which caters to today’s requirement,” he said.

The minister flagged the proposed Digital India Act as the third leg of this framework. “We are working on it. After the elections are over, we will start a consultation process,” he said.

Continuity and change
Building upon the foundation of its past 10 years in government, a possible third term will set the ball rolling on Viksit Bharat 2047, the ambitious plan to transform India into a developed country. “We have a roadmap for the next 25 years,” he said.

The entire vision is woven around how a sustainable, transformational change can be brought to the lives of citizens, Vaishnaw said. This thought will be realised through a lot of policy interventions, investments, use of technologies and re-engineering of government processes, he said. Business Standard