Tesla Eyes Indian Semiconductor Suppliers as It Diversifies Global Supply Chain
Tesla, led by Elon Musk, is actively broadening its semiconductor supply base by engaging with Indian firms Micron, CG Semi, and Tata Electronics. Following a strategic pact with Tata Electronics last year, Tesla recently initiated discussions with these companies to understand production capabilities, timelines, and chip types under development. Micron and CG Semi are investing heavily in new assembly and testing facilities in Gujarat, while Tata is building a massive semiconductor fab in Dholera and an OSAT facility in Assam. These moves come amid Tesla’s shift away from heavy reliance on Chinese fabs, driven by rising geopolitical tensions and increased costs. Elon Musk’s planned visit to India later this year underscores the country’s growing importance in Tesla’s global strategy.
This development is highly relevant for non-Indian companies seeking to reduce exposure to traditional supply chains centered around China and Taiwan. India’s expanding semiconductor ecosystem, boosted by billions of dollars in investment and strong government backing, offers an attractive alternative for global EV makers and electronics firms. As the semiconductor landscape reorganizes, India’s emerging position as a fabrication and packaging hub could redefine sourcing strategies for companies worldwide.
Editor’s Note: Tesla is expanding its semiconductor supply chain by engaging with Indian companies like Micron, CG Semi, and Tata Electronics, following a strategic shift away from reliance on Chinese fabs. Major investments in new facilities across Gujarat, Assam, and Dholera signal India’s growing role in global chip production. Backed by strong government support, India’s emerging semiconductor ecosystem is becoming an attractive alternative for global firms seeking to diversify sourcing.
IISc Scientists Propose Development of Angstrom-Scale Chips Using 2D Materials
A 30-member team from the Indian Institute of Science (IISc) has submitted a proposal to the Indian government to develop ‘angstrom-scale’ semiconductor chips, using a new class of ultra-thin materials known as 2D Materials. The project aims to create chips nearly one-tenth the size of today’s smallest commercial chips, currently at the 3-nanometer node produced by companies like Samsung and MediaTek. The detailed project report (DPR), initially submitted in 2022 and revised in 2024, outlines the use of materials such as graphene and transition metal dichalcogenides (TMDs) to potentially replace traditional silicon in chip fabrication. The proposal is currently under active discussion between the Principal Scientific Adviser’s office and the Ministry of Electronics and IT (MeitY), with officials expressing strong interest in exploring electronics applications for this breakthrough technology.
The IISc initiative holds major significance for non-Indian companies as well, especially as global firms seek to innovate beyond the limits of silicon-based chip manufacturing. With supply chains evolving and new materials gaining importance, India’s entry into 2D material-based semiconductor R&D could offer strategic collaboration opportunities and alternative technology hubs outside the traditional powerhouses of the US, Japan, South Korea, and Taiwan. As global demand rises for more powerful and efficient chips, partnering with emerging players like IISc could help firms stay competitive in the next generation of semiconductor innovation.
Editor’s Note: A 30-member IISc team has proposed developing angstrom-scale chips using 2D materials like graphene and TMDs, aiming to create chips nearly one-tenth the size of current 3nm nodes. The project, now under review by India’s top scientific and electronics bodies, could mark a shift from traditional silicon-based technology. As global firms seek breakthroughs beyond silicon, India’s push into 2D material-based semiconductors offers new avenues for collaboration and innovation.
Cathay United Bank Secures Approval to Establish First Branch in India
Cathay United Bank (CUB) has received approval from Taiwan’s Financial Supervisory Commission (FSC) to establish a branch in Mumbai, India, marking its first physical presence in South Asia. This move supports CUB’s broader strategy to build a robust cross-border financial network across Asia and to strengthen financial services for Taiwanese companies investing in India. With Mumbai as its base, CUB’s 68th overseas branch will focus on corporate finance, trade finance, cross-border transactions, and foreign exchange services. According to CUB President Alan Lee, India’s status as the world’s fifth-largest economy and a major growth driver makes it a critical hub for expanding international banking operations. The Mumbai branch awaits final approval from the Reserve Bank of India to commence operations.
For non-Indian companies, CUB’s expansion into India is a sign of the growing financial connectivity between Asia’s major economies. It reflects the increasing importance of India as a manufacturing and investment destination amid global supply chain realignments. Foreign companies operating in India or planning entry into the South Asian market could benefit from expanded financial options, including trade finance and cross-border banking services tailored to support multinational operations.
Editor’s Note: Cathay United Bank (CUB) has received approval to open its first branch in South Asia, located in Mumbai, to support Taiwanese companies and expand its cross-border financial network. The branch, pending final approval from the Reserve Bank of India, will offer corporate finance, trade finance, and foreign exchange services. This move highlights India’s growing role in global supply chains and offers foreign firms enhanced financial support for regional operations.
India and Chinese Taipei Seek Delay in WTO Ruling Adoption on ICT Tariff Dispute
India and Chinese Taipei have jointly requested the World Trade Organization’s (WTO) Dispute Settlement Body (DSB) to postpone the adoption of a ruling against India’s import duties on certain information and communication technology (ICT) products until October 24, 2025. The request, which will be considered at the DSB meeting in Geneva on April 25, follows previous mutual agreements between the two parties to delay action as they work towards an amicable resolution. The WTO panel had ruled in April 2023 that India’s tariffs on products such as mobile phones and related components violated global trade norms, a case originally initiated by the EU, Japan, and Taiwan. India argues that its obligations are limited to the older ITA-1 agreement of 1997 and do not extend to products listed under ITA-2, to which it is not a signatory.
This development holds relevance for non-Indian companies involved in the ICT sector, as it impacts the trade environment for high-demand electronic goods in India — one of the world’s fastest-growing tech markets. Continued delays in adopting the ruling suggest ongoing uncertainty for global exporters, potentially affecting market access and tariff costs. Moreover, with the WTO appellate body currently non-functional due to unresolved disputes among members, the resolution of such trade conflicts could face prolonged timelines, affecting international trade strategies.
Editor’s Note: India and Chinese Taipei have requested the WTO to delay adoption of a ruling against India’s ICT import tariffs until October 24, 2025, as both parties seek a mutual resolution. The dispute stems from a 2023 WTO panel decision stating India’s tariffs on items like mobile phones violate trade norms, though India argues it is only bound by the older ITA-1 agreement. This delay adds uncertainty for global ICT exporters targeting India’s growing tech market, potentially impacting trade strategies and market access.
India to Prioritize AI, New-Age Tech Startups in Second Rs 10,000 Crore Fund of Funds Scheme
The Commerce and Industry Ministry of India plans to allocate a significant portion of the newly announced Rs 10,000 crore Fund of Funds Scheme (FFS) to startups in sectors such as new-age technologies, artificial intelligence (AI), and machine building, an official said. The new fund, announced in the Union Budget, follows a similar initiative launched in 2016 aimed at catalyzing venture capital investments. Like the earlier program, the Small Industries Development Bank of India (SIDBI) is expected to manage the scheme, providing capital to SEBI-registered Alternative Investment Funds (AIFs), which then invest in eligible startups. The move is part of a broader effort to strengthen India’s innovation ecosystem under the Startup India initiative, which has already recognized over 1,50,000 startups across 55 industries.
For non-Indian companies, especially venture capitalists and technology firms, this new fund represents a major opportunity to engage with India’s rapidly expanding startup ecosystem. Increased government-backed funding in frontier sectors like AI and machine building may create a more vibrant market for innovation partnerships, investments, and technology transfers. It also signals India’s strategic focus on becoming a global hub for emerging technologies, making it an attractive destination for collaborations and market entry.
https://www.moneycontrol.com/news/business/govt-to-provide-major-part-of-rs-10-000-crore-startup-fund-to-sectors-like-new-age-tech-ai-12993266.html
Editor’s Note: India’s Commerce and Industry Ministry will prioritize startups in AI, new-age technologies, and machine building under its second Rs 10,000 crore Fund of Funds Scheme, managed by SIDBI and targeting SEBI-registered AIFs. This initiative builds on the 2016 program to boost venture capital investments and strengthen the innovation ecosystem through the Startup India initiative. For global investors and tech firms, it offers fresh opportunities for partnerships, funding, and entry into India’s growing frontier tech market.
India’s AI Spending to Surge to $9.2 Billion by 2028, But Data Challenges Remain
Artificial intelligence (AI) spending in India is projected to grow at a 35% annual rate, reaching $9.2 billion by 2028, according to a report released by Qlik and International Data Corporation (IDC). Despite rapid cloud adoption, with 51% of Indian enterprises hosting AI solutions in the cloud, poor data quality remains a major hurdle, cited by 54% of organisations — higher than the APAC average. The report also highlights that 62% of Indian companies acknowledge gaps in data governance and privacy, while 28% struggle with AI data bias, underscoring the urgent need for improved data strategies and infrastructure readiness to fully leverage AI’s potential.
For non-Indian companies, especially tech providers, consulting firms, and cloud service operators, this rapid expansion of AI investments in India presents major partnership and market entry opportunities. However, the challenges around data quality, governance, and infrastructure suggest that firms offering solutions in these areas could be particularly well-positioned to support Indian enterprises scaling up their AI initiatives.
Editor’s Note: AI spending in India is expected to reach $9.2 billion by 2028, growing at 35% annually, driven largely by cloud adoption. However, challenges like poor data quality, weak governance, and AI bias continue to hinder progress, with 54% of organizations citing data issues. For global tech and consulting firms, this growth offers significant opportunities, especially for those addressing data infrastructure and governance gaps.