Home / Opinion / Views /  Semiconductors are the perfect candidate for the AtmaNirbhar formula

The Prime Minister, the finance minister and the minister for electronics and information technology have all been busy wooing the world’s semiconductor manufacturers to set up shop in India. This is welcome and necessary, but not sufficient. India needs not just several semiconductor fabs to come up in India, to produce the tonnes of silicon India’s growing, digitally empowered economy would require, but also to create self-reliance in the range of technologies and manufacturing capabilities associated with producing cutting-edge semiconductors, if it wants to maintain strategic autonomy.

India has cherished its independence and freedom to make its own choices in its interactions with other countries. In order to retain its autonomous space in the post-World War II geopolitics of a world divided into two camps, led, respectively, by the United States, and the Soviet Union, India had forged a policy of non-alignment. The Non-Alignment Movement had many adherents in the so-called Third World of countries that belonged to neither the First World of rich countries led by the US, nor of the Second World, comprising the Socialist Bloc, led by the Soviet Union.

This quest for autonomy in geopolitical relations is linked integrally to India’s desire to choose its own development path, instead of being dictated to by foreign powers. India wanted to industrialize fast, build its own basic goods and heavy machinery industries, instead of trudging along the path laid out for it by western development thinkers and advisors, of producing labour-intensive, low-value manufactures, while leaving technology-intensive capital goods production to imports from the First World.

Young Amartya Sen’s PhD thesis at Cambridge University, published later as Choice of Techniques, demonstrated that capital-intensive industrialization in early stages led to faster subsequent growth, as compared to slow graduation, over time, from labour-intensive production to mechanized, higher productivity production later on. This approach was gelled with the planning model of the Soviet Union, which appropriated the surplus of agriculture for capital formation in industry. By keeping agricultural prices low, even as industrial prices rose, thanks to heavy protection from external competition, planned growth in India transferred rural surplus to industry, allowing Indian industrialists to amass capital for reinvestment and growth, aided by directed loans from banks and term-lending financial institutions.

Such interventionist growth was frowned upon by the major development institutions of the period such as the World Bank, and its backers in the First World. India sought help from the Soviet Union to set up a steel plant. The Soviet Union obliged. That led to assistance from the West to set up additional steel plants: the West was keen to keep India in its sphere of influence at a time, following the Chinese revolution, Asian countries were deemed to falling like dominos into the Communist camp.  

India learned to play the Soviets off against the West, and get concessions from both. However, this policy of equidistance did not mean neutrality between the two sides in all cases. While India got assistance from both camps for its early nuclear and space ambitions, after the Pokhran test of 1974 (a peaceful nuclear experiment, according to Indira Gandhi, who had commissioned the test in 1972), the West cooled off on India’s nuclear and rocket capability, while the Soviet Union stayed supportive. India’s policy of support for liberation struggles around the world also pitted India against the West, many of whose members still sought imperial dominion over colonies and ex-colonies, while the Soviet Union supported all movements that weakened its opponents in the First World.

In 1972, India sided with the Bengali nationalists, who were being massacred by the Pakistani army in erstwhile East Pakistan. The US actively supported Pakistan, the Nixon-Kissinger duo, focused on using Pakistan to get through to Beijing, not just overlooked the slaughter of Bengali civilians by the hundreds of thousands by the Pak army and its militias but also chose to send over the US Seventh Fleet to Indian waters to scare off Indian forces from intervening. India then signed a treaty of Friendship and Cooperation with the Soviet Union. Soviet submarines showed up in the Bay of Bengal ahead of the Seventh Fleet and the Americans chose to retreat. Bangladesh was formed.

The short point is that there could be moments of stress and conflict between India and the major powers and, in order to preserve the capacity to stay autonomous, India needs not just smart alliances but also indigenous capability. Today, the world of advanced technology is fragmenting into separate camps. US technology is being denied to China. China is bent on developing its own tech capability. The ability to launch missiles, guide them accurately to their targets, evade detection, as much as possible, track hostile manoeuvres — everything involves the use of advanced computing and associated semiconductors. If access to processors were to be withheld on any count — a partisan US Congress might do that just to spite their President — precisely when India needs them, India would stand disarmed, if not crippled.

Western companies’ readiness to set up their advanced silicon fabs in India does not guard against such an eventuality. Just as assorted western companies are refusing to sell Russia anything in the wake of western sanctions against the invader of Ukraine, western technology companies might decide they cannot sell their products to India because the sale would violate US sanctions or invite a popular backlash.

The only way to insulate India from such a scenario of technology denial is to develop indigenous capability. Indian researchers are capable of the task. The challenge is to harness that capability. We need not just semiconductor design, but the design of the sophisticated equipment that goes into the manufacture of semiconductors and of the capacity to manufacture such kit. It can all be done: India has the needed number of qualified engineers capable of rising to the challenge. It calls for money, the political will and an institutional mechanism to fund—through subsidies from the budget if necessary—the right research projects and the right startups in the field.

If India can send up a Mars probe, India can crack this, too. The political will must be summoned, not just the energy to glad-hand established western semiconductor companies.


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