India plans $10.8 billion fund to support local semiconductor manufacturing

Mumbai (TIP): India plans to unveil a more than 1 trillion rupee ($10.8 billion) fund aimed at bolstering domestic chipmaking, advancing its ambitious bid to become a global manufacturing hub.
The fund, which will provide subsidies for chip design projects, manufacturing equipment and supply chain development, may be launched in two to three months, people familiar with the matter said, asking not to be named as the plan isn’t yet public. The plan is still under discussion and may change.
Prime Minister Narendra Modi is trying to accelerate India’s chip campaign, which is in early stages with just a handful of major projects under way. Governments around the world are ramping up support for their chip industries to become more self-sustaining and fulfill rising demand from developers of everything from AI and smartphones to cars and appliances.
India’s easing of FDI rules gives limited opening to China firms
India’s decision to ease FDI rules for neighbouring countries may reopen the door to China, but strict ownership limits mean large firms such as BYD Co. and Great Wall Motor Co. will still face same screening requirements.
New Delhi has relaxed FDI rules for investments from countries sharing a land border with India, allowing automatic approval for non-controlling stake of up to 10%, subject to compliance requirements. The changes underscore India’s push to attract capital, while highlighting continued caution toward China.
“We are opening up in a strategic and calibrated manner,” Amardeep Singh Bhatia, secretary in the Department of Commerce told reporters in New Delhi. “It’s a changing world and the opening up doesn’t mean that concerns with regards to security have gone away.”
The easing stops well short of restoring full parity for investors from neighboring countries, who will continue to face additional scrutiny and restrictions compared with other foreign firms. While the move signals a cautious thaw with China and an effort to bolster growth amid Middle East-driven uncertainty, companies such as BYD and other major investors would still face ownership and regulatory hurdles before making major commitments.