India entered semiconductor industry a bit late, but will soon start exporting: Amit Shah

The Union Home Minister Amit Shah's statement regarding India's late but promising entry into the semiconductor industry, with an aspiration to become an exporter, marks a significant pronouncement on India's strategic economic and technological ambitions. This declaration underscores the government's aggressive push towards achieving self-reliance in a sector considered the bedrock of modern technology and national security.

The background context for this renewed focus is multifaceted. Semiconductors, or microchips, are the 'brains' of all electronic devices, from smartphones and laptops to automobiles, industrial machinery, defense equipment, and critical infrastructure. The global COVID-19 pandemic severely disrupted global supply chains, leading to a critical shortage of semiconductors and exposing the vulnerabilities of nations heavily dependent on imports. This crisis highlighted the urgent need for countries like India to develop indigenous manufacturing capabilities to ensure economic stability and strategic autonomy. Historically, India made an early attempt with the establishment of Semiconductor Complex Limited (SCL) in Mohali in 1983, but subsequent technological lags, funding issues, and a devastating fire in 1989 significantly hampered its progress, leading to India falling behind global leaders like Taiwan, South Korea, and the United States.

What happened is a clear articulation of India's determination to overcome its 'latecomer' status. Shah's optimism is rooted in the substantial policy initiatives launched by the government. The most prominent among these is the India Semiconductor Mission (ISM), launched in December 2021, with an outlay of INR 76,000 crore (approximately $10 billion). This mission aims to establish a complete semiconductor ecosystem, encompassing design, fabrication (manufacturing), and ATMP (assembly, testing, marking, and packaging) facilities. The government is offering significant fiscal incentives, including up to 50% of project costs for setting up fabrication units, to attract global and domestic players.

Key stakeholders involved in this ambitious endeavor include the Government of India, particularly the Ministry of Electronics and Information Technology (MeitY) as the nodal agency, and the Department for Promotion of Industry and Internal Trade (DPIIT) for investment facilitation. The private sector is crucial, with major domestic conglomerates like Tata and Vedanta expressing interest, and global giants such as Micron Technology already committing investments to set up ATMP facilities in India. Research and academic institutions, including IITs and IISc, are also vital for fostering R&D, innovation, and developing a skilled workforce necessary for this highly specialized industry.

This matters immensely for India on several fronts. Economically, a thriving semiconductor industry would lead to massive job creation, both direct and indirect, boost GDP, and significantly reduce India's import bill for electronic goods, which currently constitutes a substantial portion of its trade deficit. It aligns perfectly with the 'Make in India' and 'Atmanirbhar Bharat' (self-reliant India) initiatives, positioning India as a global manufacturing hub. Strategically, indigenous semiconductor capabilities are paramount for national security, ensuring secure access to critical components for defense and space programs, and reducing reliance on potentially hostile foreign supply chains. Geopolitically, a strong presence in the semiconductor sector would enhance India's strategic autonomy and influence in an increasingly technology-driven global order.

The constitutional and policy framework underpinning this initiative is primarily economic and developmental. While there isn't a direct constitutional article specifically for semiconductors, the Directive Principles of State Policy (DPSP) implicitly support such endeavors. Article 38 mandates the State to promote the welfare of the people by securing a social order in which justice, social, economic, and political, shall inform all the institutions of national life. Article 39 directs the State to secure that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. These principles provide the overarching guidance for policies aimed at industrial growth, technological advancement, and economic self-reliance. Furthermore, Article 51A(h) on Fundamental Duties encourages citizens to develop scientific temper, humanism, and the spirit of inquiry and reform, which is vital for nurturing an innovation-driven ecosystem. The specific policies like the India Semiconductor Mission, Production Linked Incentive (PLI) schemes for electronics manufacturing, and the National Policy on Electronics (NPE 2019) are the direct instruments driving this ambition.

The future implications are profound. While the path is fraught with challenges—high capital investment, long gestation periods, technology acquisition hurdles, and intense global competition—successful implementation could transform India into a significant player in the global semiconductor value chain, not just for domestic consumption but as an exporter. This would entail moving beyond assembly and packaging to advanced fabrication, fostering a robust ecosystem for design, R&D, and manufacturing. The vision of 'soon start exporting' signifies India's aspiration to transcend its role as a consumer and become a producer and innovator, securing its place in the critical technology landscape of the 21st century and bolstering its economic resilience and strategic independence.