India's tech manufacturing growth stalled as COVID raged

Inventors, assemble!


India's attempts to turn itself into a global electronics manufacturing powerhouse appear to have stalled a little, with government data showing negligible growth in value of production and a reduction in exports. But the nation has also revealed a plan to improve matters: a supergroup of expats who will help grow its semiconductor industry.

Data released to India's parliament yesterday details a steady rise in production value from $42 billion in 2016/17 to $70 billion in 2019/20. Exports more than doubled in that period – from $5 billion to $11 billion.

But growth stalled in 2020/21 – value of production expanded by just $2 billion to $72 billion – and exports went backwards by around $250 million despite the world's enormous hunger for electronics during the COVID-caused remote working boom.

COVID would also, of course, have made it harder for Indian manufacturers and exporters to secure the components they needed to make finished products.

But the dip in output still coincided with India pumping billions in subsidies to manufacturers of consumer and enterprise electronics. While such schemes have lengthy lead times before they produce results, India's incentives for consumer-centric kit have been in place for almost a decade. Given India plans to become both self-sufficient for electronics, and an exporter to rival the likes of China, the dip is not good news.

India's latest world domination plan – its mission to grow a semiconductor industry – has also underwhelmed. An initial pot of $10 billion in subsidies failed to attract any firms with a track record manufacturing silicon.

Now the nation has created an advisory board packed with heavy hitting expats to speed things along.

Among the talent recruited to the new board are Vinod Dham, who led development of the Pentium processor at Intel and then AMD's pin-compatible K6 processor, before embarking on a lengthy and successful career as an entrepreneur and venture capitalist. HCL co-founder Dr Ajai Chowdhry is also aboard, along with former Global Foundries CEO Ajit Manocha (now CEO of lobby group SEMI), and MIMO inventor Professor Arogyaswami Paulraj.

Those worthies, plus relevant ministers and department secretaries, have been charged with devising strategies for India to develop a sustainable semiconductor and display ecosystem – including the creation of a resilient supply chain, investment attraction, financing, and engagement with global players. Growing local semiconductor businesses and talent is also on the to-do list.

India is enormously proud of its tech diaspora. IBM, Microsoft, Alphabet, Adobe, Twitter, and NetApp are among the tech companies led by CEOs born in India. Putting some of its most distinguished leaders to work on its modestly named Semiconductor Mission will be very well received, and should give that plan a more than decent chance of succeeding. ®

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