Are Government’s New Schemes For Semiconductors Enough To Make India Atmanirbhar?

the Union Cabinet recently approved a ‘comprehensive programme for the development of a sustainable semiconductor and display ecosystem’. This programme emphasised that India intends to play a more prominent role in the hyper-globalised semiconductor supply chain. Following up on that announcement, the Ministry of Electronics & Information Technology (MeitY) on December 21 notified four specific schemes to reduce India’s dependency on imports and build an ecosystem for the production of semiconductors. On December 30, MeitY released the guidelines for these schemes.

A retreat from global trade will hurt India’s geopolitical stature

Almost a year ago, this column had warned that the economic slowdown that India was experiencing would have a negative impact on India’s geopolitical standing, because it is “presumptuous to expect countries and companies to be sympathetic to India’s political interests if they do not see an economic upside". “Sheer momentum will allow Indian foreign policy to tide over a mild, short slowdown. If, however, we go into a deep, prolonged slump, we should expect a tough time in international relations." This was before the COVID pandemic began. Events and India’s own policy choices since then have worsened the prognosis.

With an economic recovery distant, rising trade restrictions, and a reluctance to participate in a wider geopolitical contest against China, India risks undermining its relevance as a world power. For its part, Beijing is unlikely to miss any opportunity to push its hegemonic agenda further and box New Delhi into a sub-subcontinental role. The international environment that was so conducive to India’s developmental and political interests over the past three decades might turn against us within the next couple of years. One has only to recollect the experience of the 1970s and 80s—when import and foreign exchange restrictions, international sanctions and foreign sympathy for domestic insurgencies kept us on the back foot and dissipated our strategic establishment’s energies—to conclude that the government should do everything possible to avoid a similar plight.Read More