India’s Semiconductor Manufacturing Momentum

India is rapidly emerging as a strategic hub for chip production, buoyed by shifting trade dynamics and attractive government incentives. Analysts at Barclays highlight several catalysts driving this acceleration:

• Global Chipmakers Commit
  Infineon signed an MoU with CDIL for local packaging services, while NXP is in talks with Tata Electronics to secure OSAT and foundry capabilities—moves that validate India's growing supply-chain competitiveness.

• Tariff-Driven Diversification
  With U.S.-China tensions prompting higher reciprocal levies, multinationals are diversifying out of China; India's relatively lower tariffs and active U.S. trade talks make it an appealing alternative.

• Incentive-Led Growth
  The government's $2.7 billion incentive program for electronics components offers revenue-linked and capex support—designed to reduce import dependency and spur domestic semiconductor output.

• Ramping Capacity
  Major players—from Apple's India-assembled iPhones to Foxconn's planned 300-acre facility—signal a broader shift toward onshore assembly, testing, and tooling.

Early indicators reflect this momentum: capital-equipment imports for semiconductor manufacturing have surged, and valuation metrics point to room for growth. According to FMP's Industry PE Ratio data, India's semiconductor sector currently trades at a discount versus global peers, suggesting further upside as local capacity scales and yields improve (Industry PE Ratio API).