India's semiconductor push stalls amid financing shortfall and trade imbalance
India ranks third globally for new semiconductor firms, but weak funding, low R&D investment and a growing trade deficit threaten the sector’s growth despite recent government incentives.
The country has attracted a high number of semiconductor company registrations, placing it behind only two other nations. However, analysts note that capital availability remains limited and research spending is insufficient to sustain momentum. A widening trade deficit further compounds the challenges. Prime Minister Narendra Modi has reiterated a vision of making India a reliable hub for chip manufacturing, and the government has announced two support packages, yet the funding gap persists.
Why it matters
India's ability to develop a self-sufficient chip industry impacts global supply chains and its own economic competitiveness.
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