India’s semiconductor industry faces tough challenges

Significance The move is in line with Prime Minister Narendra Modi's promise to transform the country into one of the key players in the global semiconductor industry. As a US partner, India could significantly benefit from foreign semiconductor firms’ relocation away from China amid heightened US-Chinese tensions. Impacts The goal to develop its semiconductor industry will put India in direct competition with countries such as Vietnam, Japan and Germany. India will boost ties with key semiconductor players including Taiwan, South Korea and the EU to enable essential trade for chipmaking. Continued reliance on importing key components and advanced technology will worsen the goods trade deficit.