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(Bloomberg) -- India is set to revive its effort to lure prospective chipmakers into the country as projects already disclosed, including billionaire Anil Agarwal’s $19 billion plan, are taking time to get off the ground.
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New Delhi plans to reopen the application process for $10 billion in incentives and assistance intended to encourage local chipmaking, people familiar with the matter said. It’s also keeping the process open-ended, doing away with a previous 45-day requirement for submission, they said, asking not to be named as the discussions aren’t public. That’s after an initial effort launched last year only attracted three applicants — all of which have made little progress so far.
India is joining countries including the US in trying to boost chip output to reduce reliance on expensive imports and dependence on Taiwan and China. The effort has yet to result in any large global chip player moving base to the South Asian nation, underscoring the major challenge supply chain shifts involve.
To kick-start a domestic chip industry, Prime Minister Narendra Modi’s government originally gave companies just 45 days, beginning Jan. 1, 2022, to apply for fiscal support. The state pledged to fund as much as half the cost of building a chip fabrication plant. But the short window led to just a few applicants including a partnership between Agarwal’s Vedanta Resources Ltd. and Taiwan’s Hon Hai Precision Industry Co., and a consortium that includes Tower Semiconductor Ltd.
India now plans to allow companies to apply again and is set to accept applications until its budgeted $10 billion in incentives is exhausted, the people said. That means the Vedanta and Tower groups might not be the only ones racing to win federal support for chip plants. India’s salt-to-software Tata conglomerate has publicly voiced its ambitions to get into chipmaking.
India’s technology ministry didn’t respond to an email seeking comment.
Semiconductor production is an uphill task for metals and mining group Vedanta and its iPhone maker partner Hon Hai — neither has significant experience in manufacturing chips. Separately, Vedanta is also reeling under a heavy debt burden, which means Agarwal’s dream to build a chip plant hinges on government aid. The company is just weeks away from winning an in-principle or preliminary government nod, but ultimately obtaining the state funding requires further difficult steps, the people said.