WEEKLY NEWS UPDATE
Elon Musk’s Starlink gets in-principle govt nod, one-step away from bagging satellite services license
India has given nitial approval to Elon Musk’s Starlink satellite communication venture, just ahead of Musk’s planned visit to the country. The telecom ministry’s nod brings Starlink closer to obtaining a license for its services. However, final approval is pending as the telecom minister awaits clearance from the home ministry regarding security concerns, particularly regarding the ownership structure to ensure no stakeholder shares a land border with India. Once these hurdles are cleared, Starlink will be granted the license for global mobile personal communication by satellite (GMPCS) services.
Starlink has been directed by the Indian government to ensure that KYC details and other user information remain within India, aiming to prevent data from flowing outside the country. The telecom ministry’s directive also requires Starlink to submit an undertaking that traffic over Indian waters and airspace terminates only at local gateways, for security reasons. Additionally, the government has stipulated that data beams from Starlink satellites should exclusively land in India, preventing them from reaching foreign shores. This move comes as existing telecom giants like Bharti Airtel and Reliance Jio have already established themselves in the satellite communication sector, potentially setting the stage for competition.
Tata-Tesla deal has just gained India a big strategic advantage
The first semiconductor chip from the Tata Group and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) plant in Gujarat’s Dholera is expected to be ready by the end of 2026, with substantial government subsidies covering up to 70% of the project cost. This Dholera unit is slated to become India’s inaugural commercial semiconductor fab, marking a significant milestone in India’s technological advancement.
Prior to the production launch in Dholera, Tata Electronics has reportedly secured a strategic deal with Tesla to procure semiconductor chips for its global operations. While both Tata and Tesla have declined to comment, this potential partnership signifies a proud moment for Tata and a significant milestone for India. By supplying chips to Tesla vehicles worldwide, India stands to establish itself as a prominent player in the semiconductor industry, previously dominated by Taiwan, China, and South Korea. This deal not only highlights India’s technological prowess but also underlines the strategic significance of such collaborations for the country’s future.
Editor’s Note: The forthcoming semiconductor chip production in Dholera, Gujarat, facilitated by Tata Group and PSMC, coupled with Tata’s strategic deal with Tesla, symbolizes a pivotal moment for India’s technological trajectory. This collaboration not only enhances Tata’s global presence but also positions India as a formidable contender in the semiconductor industry, reshaping the landscape of technological innovation. This is also a good example of a Taiwan-India semicon collaboration.
India’s electronic manufacturing expected to increase by 41% by FY26
India’s electronic manufacturing industry is poised for substantial growth, with a projected annual growth rate of 41% until FY 26, according to a report by Equiris Securities. By FY 26, the electronic manufacturing market in India is expected to surge to Rs 5,980 billion from its 2021 valuation of Rs 1,069 billion. This growth trajectory is attributed to government initiatives aimed at positioning India as a global manufacturing hub for electronics, evolving global manufacturing trends, and the country’s ample supply of skilled labor.
Despite significant progress in manufacturing, India’s reliance on imported laptops, primarily from China, remains a challenge, echoing the country’s dependence on imported olives for olive oil. To address this, Sandeep Narula, Chairman of the Electronics and Computer Software Export Promotion Council, emphasizes the need to develop a domestic semiconductor ecosystem to reduce the current 95% dependency on foreign semiconductors. India’s decision to defer import restrictions on laptops until September 30, 2024, and introduce an import management system is seen as a strategic move to enhance domestic manufacturing capabilities.
Editor’s Note: India’s electronic manufacturing sector is poised for remarkable growth, with projections indicating a 41% annual increase until FY 26, driven by government initiatives and evolving global trends. Despite challenges such as reliance on imported laptops, strategic measures like deferring import restrictions and fostering a domestic semiconductor ecosystem underscore India’s commitment to bolstering its manufacturing prowess.
RIL, L&T to invest INR 1 lakh crore investment in green hydrogen
Reliance Industries Ltd (RIL), Larsen and Toubro (L&T), along with energy companies Greenko Group and Welspun New Energy, are poised to establish green hydrogen and green ammonia units at Gujarat’s Deendayal Port Authority (DPA) in Kandla, according to sources familiar with the matter. This project, which is anticipated to attract a cumulative investment of up to INR 1 lakh crore, is set to become one of the largest investments in both the green energy sector and the broader energy infrastructure space in India.
In October of the previous year, the port authority received expressions of interest for 14 land parcels, each spanning 300 acres, with each parcel designated for the production of 1 million tonnes per annum (MTPA) of green ammonia. Last month, DPA formally allotted the plots to the four companies involved in the initiative, paving the way for significant advancements in India’s green energy landscape.
Editor’s Note: Reliance Industries Ltd (RIL), Larsen and Toubro (L&T), alongside Greenko Group and Welspun New Energy, are set to make a substantial investment of INR 1 lakh crore in establishing green hydrogen and green ammonia units at Gujarat’s Deendayal Port Authority. This initiative, involving 14 land parcels and targeting a production capacity of 1 million tonnes per annum of green ammonia, signifies a monumental leap forward in India’s pursuit of sustainable energy solutions.
Lam Research to provide software valued at Rs 241 crore to upskill Indian semiconductor workforce
US-based semiconductor equipment company Lam Research Corp has announced its intention to donate software worth Rs 241 crore aimed at upskilling the workforce in India to meet the demands of the electronic chips industry. Through a memorandum of understanding (MoU) with India Semiconductor Mission (ISM) and the Indian Institute of Science (IISc), Lam Research Corp plans to facilitate the widespread deployment of Semiverse Solutions to bolster India’s semiconductor manufacturing workforce.
This agreement follows a significant development stemming from a joint statement and fact sheet issued by the governments of the US and India at the White House in June 2023, coinciding with Prime Minister Narendra Modi’s visit to the US. By collaborating with key institutions and leveraging cutting-edge software solutions, Lam Research Corp seeks to contribute to the advancement of India’s semiconductor industry, aligning with broader goals of enhancing technological capabilities and fostering innovation within the country.
Editor’s Note: Lam Research Corp’s donation of software valued at Rs 241 crore, in partnership with India Semiconductor Mission (ISM) and the Indian Institute of Science (IISc), underscores its commitment to upskilling India’s semiconductor workforce. This initiative, spurred by collaborative efforts following a joint statement between the US and India, reflects a shared vision of advancing technological capabilities and fostering innovation in India’s semiconductor industry.
Moody’s continues to give India a stable outlook
Moody’s maintained a stable outlook for the government of India, affirming its long-term and short-term ratings at Baa3 and P-3, respectively. This decision reflects confidence in India’s fiscal trajectory, with expectations of gradual improvement in fiscal metrics amidst robust growth prospects compared to its peers. Despite challenges such as high government debt and weak debt affordability, Moody’s underscores India’s strengths, including its large and diversified economy, stable domestic financing base for government debt, and ongoing infrastructure development and digitalization efforts.
Following a series of strong growth numbers in the first three quarters of the financial year 2023-24, Moody’s has revised India’s real GDP growth projection to 8% for the full year, with expectations of sustained growth well above 6% over the next two fiscal years. The rating agency highlights India’s resilience and emergence from the pandemic, driven by factors like infrastructure development, digitalization, and financial system rehabilitation. Moody’s also anticipates India’s economic growth to outpace that of other emerging market G20 peers in 2024-25, propelled by sustained domestic demand momentum.
Editor’s Note: Moody’s decision to maintain a stable outlook for India, backed by its affirmation of long-term and short-term ratings, reflects confidence in the country’s fiscal trajectory and robust growth prospects. Despite challenges like high government debt, Moody’s emphasizes India’s strengths, including its large and diversified economy, stable domestic financing base, and ongoing infrastructure and digitalization efforts. With revised GDP growth projections of 8% for the current fiscal year and expectations of sustained growth above 6% in the coming years, Moody’s anticipates India’s economic resilience and outperformance among emerging market peers, driven by factors like infrastructure development and sustained domestic demand.