MediaTek Eyes India for 20% of Global Automotive Chip Deployment, Doubles Down on Local Innovation
Taiwanese semiconductor giant MediaTek is ramping up its presence in India’s automotive sector, projecting the country will account for 20% of its global automotive chip deployments within the next five years. According to Rita Wu, Director of Product Marketing for MediaTek’s Automotive Platform, India’s unique market dynamics are driving the company’s localized approach, supported by a growing team of engineers and dedicated R&D centers in Bengaluru and Noida. With connected car adoption expected to grow at 18% CAGR from 2025 to 2030, MediaTek sees India’s expanding electric vehicle ecosystem and government incentives as strategic catalysts. The company is already working with major Indian automakers including Tata Motors, JSW MG Motor India, and Skoda.
MediaTek’s Dimensity Automotive lineup—featuring advanced AI, energy efficiency, and robust cybersecurity—reflects the firm’s push to deliver next-generation in-car experiences tailored to Indian conditions. While the chips are manufactured abroad by partners like TSMC, MediaTek is open to future collaboration with Indian fabs as the domestic semiconductor industry matures. For non-Indian companies, the message is clear: India is no longer just a consumer market but a development hub for future automotive technologies. As OEMs reevaluate global sourcing and software becomes central to vehicle performance, engaging with India’s automotive and semiconductor landscape is becoming essential for sustained competitiveness.
Editor’s Note: MediaTek plans to deploy 20% of its global automotive chips in India within five years, leveraging local innovation, R&D centers, and partnerships with Indian automakers to meet the country’s growing demand for connected and electric vehicles. With its AI-driven Dimensity Automotive lineup and openness to future collaborations with domestic fabs, MediaTek positions India as a development hub for next-gen automotive technologies.
India’s Service Sector Powers Towards $5 Trillion Economy Milestone
India’s service sector is emerging as the cornerstone of the nation’s economic ascent, contributing an estimated 55% of gross value added (GVA) in FY25, up from 40% in the 1990s, according to Axis Mutual Fund’s latest ‘Service Sector Report’. With India’s nominal GDP nearing $4 trillion in FY25 and projected to reach $4.19 trillion by year-end, the sector’s sustained growth has been driven by robust performances across IT, banking and finance, healthcare, telecommunications, and e-commerce. IT services alone have expanded from $8 billion in 2000 to $245 billion in FY24, with projections of hitting $300 billion by FY26. Similarly, mutual fund assets under management (AUM) have grown over 20% annually to reach ₹72.19 lakh crore as of May 2025, while healthcare and telecom sectors have seen dramatic growth, supported by digitisation and surging consumer demand.
Accelerated by the Digital India initiative, liberalised FDI norms, and business-friendly reforms, India’s service sector is now a global-scale growth engine. For non-Indian companies, this surge presents significant opportunities—not only to tap into a thriving consumer base but also to invest in or partner with Indian firms across tech, finance, and digital infrastructure. As India moves closer to its $5 trillion economy target, aligning with its service sector boom can be a strategic advantage for global players seeking emerging market growth and innovation potential.
Editor’s Note: India’s service sector, now contributing 55% of GVA, is propelling the economy toward a $5 trillion milestone through dynamic growth in IT, finance, healthcare, and telecom, fueled by digitisation, liberalised FDI, and supportive reforms. This transformation offers global companies major opportunities to invest, partner, and innovate within India’s rapidly expanding tech and digital infrastructure landscape.
US Extends Tariff Suspension for India Until August 1, Easing Pressure on Trade Talks
In a relief to Indian exporters, the United States has extended the suspension of its proposed reciprocal tariffs on Indian goods until August 1, offering crucial breathing room for New Delhi and Washington to conclude an interim trade deal. Initially announced in April with a 90-day window, the tariffs—which included a 26% duty on Indian products—were set to take effect on July 9. However, India was notably absent from the first round of tariff letters sent this week to several other countries, including Japan, South Korea, and Thailand. The White House attributed the extension to ongoing negotiations and new input from senior officials, signaling a constructive approach towards resolving bilateral trade concerns.
Indian exporters and trade analysts welcomed the move, saying it gives negotiators more time to iron out contentious issues and potentially finalize a bilateral trade agreement (BTA) focused on goods by month-end. With the US remaining India’s largest trading partner—accounting for $131.84 billion in goods trade in FY25—the tariff relief also strengthens India’s comparative advantage amid Washington’s steep 145% tariffs on Chinese goods. For non-Indian companies, the development underscores the importance of resilient trade partnerships and highlights India as a stable and increasingly strategic partner in global supply chains. Firms looking to diversify sourcing away from China may find new opportunities in India’s export ecosystem, especially if a trade deal materializes soon.
Editor’s Note: The US has extended its tariff suspension on Indian goods until August 1, allowing more time for both nations to finalize an interim trade deal and easing pressure on exporters. This move positions India as a reliable trade partner amid shifting global supply chains, especially as companies seek alternatives to China.
India’s Data Centre Boom: ₹2 Lakh Crore Pipeline to Drive 7.1 GW Capacity Surge
India is on track to become a major global digital infrastructure hub, with its data centre capacity projected to reach 7.1 GW, backed by a massive ₹2 lakh crore investment pipeline. Spanning 87 projects across 17 states, the expansion is fueled by skyrocketing demand for digital services, cloud computing, and artificial intelligence. Currently, only 14% of this capacity has been commissioned, while 86% remains under construction or planning—signaling immense growth potential. The data centre push is also aligned with India’s sustainability goals, with many new facilities incorporating renewable energy and energy-efficient technologies to minimise environmental impact.
Government incentives and infrastructure support are accelerating this momentum, particularly in tier-2 and tier-3 cities, decentralizing digital infrastructure beyond metro areas. For non-Indian companies, this expansion offers strategic opportunities in multiple sectors—from cloud and AI services to real estate development and renewable energy integration. With India’s digital economy rising rapidly, global tech and infrastructure firms have a unique window to invest, partner, and embed themselves into a market poised for transformative growth.
Editor’s Note: India is rapidly expanding its data centre capacity to 7.1 GW through a ₹2 lakh crore investment across 87 projects, driven by surging demand for digital services and aligned with sustainability goals. This boom, supported by government incentives and decentralised infrastructure, presents major opportunities for global firms in cloud, AI, real estate, and renewable energy sectors.
Japan Deepens Investment Ties with Gujarat, Eyes Semiconductor and EV Sectors
Japan’s Ambassador to India, Mr. Keiichi Ono, along with Minister of Economic and Development Affairs Ms. Koyoko Hokugo, met Gujarat Chief Minister Shri Bhupendra Patel in Gandhinagar to strengthen economic cooperation. The visit included a tour of Dholera Special Investment Region (SIR) and meetings with 150 industrialists in Ahmedabad. Mr. Ono praised the state’s investor-friendly climate and ongoing support to over 350 Japanese companies already operating in Gujarat. The Ambassador highlighted Japan’s keen interest in Gujarat’s semiconductor ecosystem, particularly Dholera SIR, and conveyed Japanese firms’ readiness to invest, provided world-class infrastructure and skilled manpower are ensured. In response, CM Patel reaffirmed the state’s commitment to delivering all necessary facilities within a defined timeframe and extended full cooperation for an ongoing ecosystem survey by Japan’s Mizuho Bank.
Beyond semiconductors, Japan also showed strong interest in electric vehicle manufacturing in Gujarat and called for accelerated progress on the Ahmedabad-Mumbai Bullet Train project. Ambassador Ono described Gujarat as a “second home” for Japan, citing the presence of Japanese townships, restaurants, and successful Indo-Japan collaborations like the 2017 Summit. For non-Indian companies, Japan’s deepening ties with Gujarat signal growing international confidence in the state as a high-tech investment destination. Opportunities are emerging not only in semiconductors and EVs but also in infrastructure, manufacturing, and cultural exchange—making Gujarat an increasingly strategic entry point for global firms seeking to tap into India’s industrial and digital transformation.
https://cmogujarat.gov.in/en/latest-news/japan-envoy-dholera-semiconductor-investment
Editor’s Note: Japan is strengthening investment ties with Gujarat, focusing on semiconductor and EV sectors, with its Ambassador highlighting Dholera SIR and the state’s investor-friendly climate as key drivers. As Japan deepens its footprint through infrastructure and cultural collaborations, Gujarat emerges as a strategic hub for global firms eyeing India’s tech-led industrial transformation.
India’s Semiconductor Push Could Cut Chip Imports by Up to $20 Billion: McKinsey
India’s ambitious semiconductor drive could slash its reliance on imported chips by an estimated $10–20 billion, according to a new report by McKinsey & Company. The consultancy emphasized that to realize this potential, India must adopt a dual strategy combining targeted government incentives with strategic partnerships involving global technology firms. The domestic semiconductor market is expected to triple from $34.3 billion in 2023 to over $100 billion by 2032. Currently, India’s chip industry is dominated by design, contributing nearly 20% of the global design workforce and hosting major R&D centers. Backed by $10 billion in government incentives, recent project announcements—ranging from $3 billion to $11 billion—signal growing momentum in outsourced semiconductor assembly and testing (OSAT) and legacy-node fabrication.
Despite its strengths, India’s move toward large-scale chip manufacturing remains gradual, with a target to achieve fabrication at nodes above 14nm by 2030. Key challenges include high capital intensity, limited access to cutting-edge technologies, and gaps in the local supply chain for critical inputs like specialty chemicals and ultrapure water. For non-Indian companies, this landscape presents a unique opportunity: India is not only an emerging market for chip consumption but also a fast-developing hub for design and mid-level fabrication. Strategic collaborations can help global players gain early access to a growing semiconductor ecosystem while contributing to building critical infrastructure in one of the world’s most promising tech markets.
Editor’s Note: India’s semiconductor push could reduce chip imports by up to $20 billion, driven by government incentives and strategic partnerships to scale design, assembly, and fabrication capabilities. As the market is set to exceed $100 billion by 2032, global firms have a prime opportunity to collaborate on India’s evolving tech ecosystem and critical infrastructure.
US Copper Tariffs Stir Supply Chain Concerns for India’s Chip and Electronics Sectors
The recent imposition of a 50% tariff on copper and semi-finished copper products by former US President Donald Trump has sparked concern in India’s electronics and semiconductor industries, despite limited direct trade exposure. Industry leaders warn that the new US policy could tighten global copper supply chains, potentially impacting India’s access to high-purity copper—a critical input for semiconductor packaging, chip wiring, PCBs, and power systems. Ashok Chandak, President of SEMI India and IESA, highlighted India’s continued reliance on imported refined copper and gold-coated copper wires, warning of procedural hurdles that already hamper supply. With global suppliers possibly redirecting copper exports to the higher-margin US market, Indian electronics and semiconductor manufacturers fear a squeeze on essential materials.
Though India exported just 13,000 tonnes of copper to the US in 2024, valued at under $300 million, the new tariffs could trigger indirect pressures such as dumping or shifts in global pricing. Domestic copper producers like Hindalco are unlikely to be directly impacted, but experts like Rajoo Goel of the Electronic Industries Association of India caution that India lacks the capability to produce high-purity copper and specialised alloys needed for advanced manufacturing. The situation underscores the vulnerability of India’s chip ambitions to raw material shocks, despite government support under the ₹13,100 crore Semicon India Programme. For non-Indian companies, the developments stress the need to build diversified and resilient supply chains, particularly when expanding into fast-growing but still import-dependent markets like India.
Editor’s Note: The US’s 50% copper tariff has raised concerns over tightened supply chains for India’s electronics and semiconductor sectors, potentially impacting access to high-purity copper vital for chip manufacturing. Despite limited direct trade exposure, industry experts warn of indirect pricing pressures and highlight India’s import dependency, underscoring the need for resilient supply chain strategies.