New Delhi – An MoU was signed between India and the US on the manufacturing of semiconductors. Indian Commerce and Industry Minister Piyush Goyal and US Secretary of Commerce Gina Raimondo signed the agreement. Under the newly formed agreement, India and the USA will collaborate to establish a robust supply chain essential for semiconductor manufacturing. Additionally, the two nations will provide mutual support for research and development initiatives in this field. Union Commerce Minister Piyush Goyal has expressed the belief that due to this MoU, a strong supply chain for the manufacture of semiconductors will be established.
After the outbreak of Covid, production in China, considered the factory of the world, was completely stopped. This had a tremendous impact on the manufacturing sector of other countries. Manufacturing of semiconductors stopped as production in China cooled. Today almost every product, from computers and mobiles to automobiles, requires semiconductors. Therefore, even the US and European countries could not avoid the negative economic effects due to the slowdown in semiconductor production. Thus, the world realized that in the future, it would not be possible to depend on China alone to produce semiconductors and other things and its supply chain.
Thus, developed countries have started to build a resilient supply chain. The US and European countries have concluded that India is a viable option as a hub for such a supply chain. Developed countries are worried that, in the future, China will deliberately break the supply chain and increase the world’s problems. The US passed the ‘CHIPS and Science Act’ to overcome this problem in 2022. According to this act, a provision is made to provide funds to the semiconductor industry in the US.
Moreover, with the semiconductor industry being viewed so sensitively by developed countries, including the US, this MoU between the US and India is strategically important. Because India has also undertaken a ‘Semiconductor Mission’ for the domestic production of semiconductors, it is claimed that by 2030, the turnover of the semiconductor industry in India will exceed 100 billion dollars. India is looking at the development of this industry very seriously. Hence, the US has also felt the need to cooperate with India for semiconductor manufacturing and research.
Furthermore, Commerce Minister Piyush Goyal claimed that this would create a strong supply chain in the field of semiconductors and benefit both countries. US Secretary of Commerce Gina Raimondo has said that this agreement between the two countries will benefit India, which is looking to develop its manufacturing sector.
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