India trims chip subsidies but widens their reach as it courts electronics supply chain away from China

India’s subsidy redesign signals a strategic pivot from contract assembly to building a localized tech ecosystem. Technically, extending incentives to packaging, materials, and equipment may attract mature-node supply chains, yet the absence of EDA tools, IP cores, and skilled talent limits progress beyond 28nm in the near term. Compliance-wise, project-based disbursements improve fiscal targeting but raise administrative burdens and policy unpredictability—especially for smaller vendors. In response, foundries from Taiwan, China and mainland China may accelerate Southeast Asian diversification, while Samsung and Apple could demand longer-term commitments from New Delhi. Over the next 18 months, without parallel investments in engineering education and cleanroom infrastructure, India’s ‘China-diversion’ push risks becoming a high-cost, low-value assembly hub with more political symbolism than industrial substance.