India is trying to create an indigenous chip-making industry

Oct 03, 2019

INFORMATION TECHNOLOGY can make a good claim to being India’s biggest and most successful industry. Tech hubs such as Bengaluru and Hyderabad contribute more than 13% of GDP. The country’s computer-science graduates are lauded worldwide: the bosses of two of America’s biggest tech firms, Satya Nadella of Microsoft and Sundar Pichai of Google, were born and educated in India. It is also home to the fast, cheap Jio phone network which has made Indians the world’s biggest consumers of mobile data.

Yet although many Indians work with computers, very few are employed in building them. All the components used to create Jio’s network were imported. Bengaluru and Hyderabad live off dull business-process outsourcing and back-office management. Last year India imported $55bn of electronic goods. It exported just $8bn. The fact that India’s most celebrated industry depends entirely on imports in an era in which many countries are increasingly capricious about what goods they will allow to be exported makes some officials nervous. So India is attempting to build its own chips.

It is starting from close to zero. The only factory in India that makes semiconductors—the processors at the heart of all electronic gadgets—is a government-run outfit in the city of Chandigarh. It was built in 1983 in partnership with an American chip...

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