India’s Union Cabinet, chaired by Prime Minister Modi, has approved the Memorandum of Understanding (MoU) on semiconductors signed by India and the European Union in November 2023.

The agreement sets out how the two governments will work together to build a robust semiconductor supply chain and further technological advancements in the chip sector.

Under the MoU, the EU and India have pledged to share experiences, best practices, and information on their respective semiconductor ecosystems; identify opportunities for collaborative R&D and innovation; promote skills, talent and workforce development in the semiconductor industry; and ensure a level playing field in the sector.

“Chips are vital for our economies, and we are strengthening our resilience in the new geopolitics of semiconductor supply chains,” said Thierry Breton, European commissioner for internal market, speaking in 2023 when the MoU was first signed.

“I am glad we will continue to cooperate with India, a key partner, on trade and technology issues to overcome supply chain challenges. In the longer term, our cooperation on research and skills will be essential to strengthen our resilience,” he said.

In recent years, India, like many other countries, has taken steps to shore up its domestic semiconductor supply chain resilience.

First announced in 2021, India's Modified Programme for Semiconductors and Display Fab Ecosystem allows companies to apply for up to 50 percent of capital costs for eligible semiconductor and display manufacturing projects. When the program was launched, the Indian government said it was expected to create around 35,000 high-quality positions, 100,000 indirect jobs, and attract investment worth $8.8bn.