India is planning to launch a new semiconductor fund worth over Rs 1 trillion (about $10.8 billion). This aims to support domestic chipmaking and strengthen its push to become a global manufacturing hub.

The fund is expected to offer subsidies for chip design, manufacturing equipment and supply chain development, according to people familiar with the matter. Moreover, it may be announced in the next two to three months.

The move comes as governments worldwide increase support for their semiconductor industries to secure supply chains. They also want to meet growing demand from sectors such as AI, smartphones, automobiles and electronics.

India’s initiative is similar in approach to global efforts such as the $52 billion US CHIPS and Science Act. However, it is on a smaller scale.

The new incentives will build on India’s earlier $10 billion semiconductor programme launched in 2021. That earlier programme covered up to half the cost of setting up chip projects.

That scheme has already attracted companies such as Micron Technology, which is setting up a chip assembly facility in Gujarat. Tata Group is also developing a semiconductor fabrication plant and a packaging unit in the state.

India is initially focusing on less advanced chips. However, the government aims to develop capabilities comparable to those of global leaders such as Taiwan, South Korea and the US by 2032.

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