India has set its sights on becoming a global hub for advanced manufacturing industries and has launched an extensive subsidy program to lure top companies from around the world. The government’s ambitious plan includes offering substantial support measures, including reimbursing 40 percent of construction costs for battery and semiconductor factories. The goal is to attract large-scale battery factories with an annual production capacity exceeding 20GWh, and the government plans to provide a $3 billion subsidy for battery production.

India’s Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), Rajesh Kumar Singh, highlighted the potential for cooperation between Korea and India in various sectors, especially automobiles, batteries, chemicals, and heavy industries. The electric vehicle market in India is growing at a remarkable rate of 40 percent annually, and the government is preparing policy support to boost this sector. Singh mentioned that a production-linked incentive (PLI) policy for manufacturing will be announced within the next two weeks.

To attract semiconductor manufacturing bases, the Indian government is offering up to $10 billion in support for companies that form partnerships with Indian counterparts to build factories. This support includes providing 50 percent of the required funds as subsidies. Local governments are also offering additional incentives, with 20 percent of construction costs being covered. Notable investments include Micron, a U.S. memory chip company, which invested $2.75 billion in building a semiconductor back-end facility in Gujarat, India.

Singh emphasized Korea’s strong presence in the oil and petrochemical industries. With India depending on imports for 80 percent of its petroleum usage, establishing local factories in this sector is crucial. As the Indian economy grows, leading to increased plastic usage in the petrochemical industry, the government aims to attract more factories in this sector.

While the Indian government’s subsidies and support measures have garnered interest from global manufacturing giants, concerns have been raised about the country’s lack of established industrial infrastructure and high tariff barriers. In response, Singh reassured potential investors that India is investing $1 trillion in infrastructure, including roads, ports, and airports by 2030. The government is taking significant steps to address these concerns, with more than 30 kilometers of roads being constructed daily and plans for 72 new airports in the pipeline.

India’s aggressive subsidy race to attract top manufacturing companies from around the world is a testament to the country’s commitment to becoming a global hub for advanced industries. The government’s extensive support measures, including the reimbursement of construction costs and substantial subsidies, aim to attract large-scale battery and semiconductor factories. Collaboration between Korea and India in sectors such as automobiles, batteries, chemicals, and heavy industries holds immense potential. With the government’s focus on electric vehicles, semiconductor manufacturing, and the oil and petrochemical sectors, India presents an attractive opportunity for global manufacturers. Moreover, the government’s substantial investments in infrastructure development demonstrate its commitment to addressing concerns and creating a conducive environment for trade and investment.

As India’s economy continues to grow rapidly, the country is poised to become a manufacturing powerhouse and a key player in the global market.

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