SBI urges India to integrate itself with global semiconductor supply chain

A new study by SBI Research titled “The Beginning of a New World Order of Collaborative Knowledge Economies” released on Monday pointed out that India has an opportunity to take advantage of the China + 1 strategy and integrate itself with the global semiconductor supply chain.

“India at present has a negligible share in the semiconductor supply chain. For the Semiconductor mission, India needs to start from level zero, and lots of consistent efforts will be needed to fulfil the purpose,” SBI Researchers noted.

In December 2022, the government set up the India Semiconductor Mission (ISM) to catalyse the semiconductor ecosystem in the country in manufacturing, packaging and design.

“The incentives of designing part of ISM are low. We have to fully utilise our tech potential by incentivising the Indian startups to work in collaboration with Silicon Valley firms,” SBI research pointed.

It suggested that India allow duty-free imports of raw materials used in the semiconductor supply chain, push for a special focus on semiconductors in India-EU FTA and leverage the QUAD partnership–a grouping of Australia, India, Japan and the United States.

“We need to do more to secure competitive access to Design software, Materials and Chemicals for the companies which are interested in setting up fabrication facility and/or Assembly, test and packaging unit in India,” SBI researchers said with reference to QUAD countries.

The Research also lauded India’s efforts in straightening out WTO issues, defence trade, climate finance and bilateral trade during the Prime Minister’s current visit to the US and Egypt.

“The two recent visits mark significant long-term economic gains for India. Development will have a cascading impact on economic growth in India and extended neighbourhood,” SBI Research pointed.

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