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India is a graveyard of foreign investment: China

As India aims to achieve self-reliance in the semiconductor supply chain, China perceives this move as part of the US's containment strategy against China. The growing investment plans of companies like Micron Technology in India have only intensified China's concerns, fueling its opposition to India's 'chip war' ambitions.
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Introduction:

India’s aspirations to become a player in the semiconductor industry have not gone unnoticed by China, which views these ambitions with skepticism and apprehension. Beijing perceives India’s push for self-reliance in semiconductors as part of Washington’s containment strategy against China. India’s ambitious plan to become a player in the global semiconductor industry has drawn skepticism from Chinese state media, which has labeled India the “graveyard of foreign investment” and questioned its ability to attract and sustain a domestic semiconductor supply chain. This blog explores the geopolitical dynamics surrounding India’s semiconductor ambitions and the challenges it faces in achieving self-reliance in this critical technology sector.

“India is also known as the ‘graveyard of foreign enterprises’, IBM, Samsung, Xiaomi and other companies were issued a ‘fine’, and the reason for being penalised were almost always tax-related,”

~Xinhua News Agency. Chinese state media

The ‘Chip War’ Fever:

The political, diplomatic, and industry circles in India are abuzz with discussions about the country’s semiconductor aspirations. However, Chinese state media has mocked India’s efforts, citing its history of protective policies, tax-related penalties for foreign companies, and alleged failure to deliver on promises.

The US Factor:

China views the US’s support for India’s semiconductor ambitions as part of Washington’s strategy to contain Beijing’s economic growth. The US Chips and Science Act, along with Micron’s investment deal before Prime Minister Modi’s US visit, have raised suspicions in Chinese media about India being used as an alternative to Taiwan for semiconductor supply chain.

Read more: Will China flood global markets with legacy chips?

Lessons from China:

The cautionary tale of HSMC, a fraudulent semiconductor venture in China, illustrates the challenges China faced in securing the right talent and expertise for scaling semiconductor production. India is likely to encounter similar hurdles in its quest to develop a successful semiconductor ecosystem.

“Self-reliant India will ipso facto be self-reliant in semiconductor production,” 

~Minister of External Affairs S Jaishankar.

Lessons from Taiwan:

Taiwan’s success in the semiconductor industry was built over decades, relying on its diaspora in the US and elsewhere to catalyze innovation and growth. India seeks to reach the higher nodes of the semiconductor supply chain but faces a tough road ahead in achieving complete self-reliance.

India’s Optimism:

Despite challenges, Indian Prime Minister Modi’s unwavering enthusiasm for the semiconductor sector remains evident. The country aims to achieve self-reliance in semiconductor production, but it acknowledges the geopolitical complexities of technology.

China’s Stance:

China is keen on disrupting India’s semiconductor ambitions, seeing them as part of the US’s containment strategy against China. Chinese state media’s skepticism further underscores the geopolitical dimensions at play.

Conclusion:

India’s quest to establish a robust semiconductor supply chain faces numerous hurdles, and it will require a delicate balancing act between political interests, technological advancements, and talent acquisition. While China may mock India’s efforts, New Delhi’s determination to join the semiconductor industry indicates its commitment to shaping its own technological future. The path ahead will undoubtedly be challenging, but with strategic planning and persistent efforts, India may carve a niche for itself in the global semiconductor landscape.

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