Context:

• Recently, India and the European Union signed a Memorandum of Understanding (MoU) on semiconductors to help build a “robust supply chain” and support innovation.

Key Highlights on India EU Semiconductor Pact 

• Memoranda of Understanding: The MoU was signed at the second India-EU Trade and Technology Council (TTC) meeting held virtually for deepening cooperation on the semiconductors ecosystem.
• This agreement requires India and the EU to share semiconductor ecosystem experiences, best practices, and information and establish research, development, and innovation collaborations between universities, research organisations, and enterprises.
• Review of Progress: The TTC also examined the council’s working groups’ progress in high-performance computing, digital public infrastructure, EV batteries and recycling, waste to energy, resilient supply chains, and FDI screening.

Potential Benefits of the India EU Semiconductor Pact: 

• Strategic Commodity: Semiconductors are at the center of the digital economy. Its contribution to innovation, productivity, and economic growth in the past four decades has been extensive.
• Supply Chain Diversification: In the post-COVID period, diversifying away from China-dominant supply chains has gained momentum due to geo-strategic and geo-political concerns.
• Strategic and Commercial Alignment: The agreement will help India align more with the EU and the U.S. on the semiconductor industry’s future. Both sides will also identify areas for mutually beneficial collaboration in research, development, and innovation in semiconductor technologies, including advanced packaging technologies, design, and raw materials.

• Exchange of information: It  will involve information on trade barriers, disruptions, and their potential impact on the semiconductor value chain and explore measures to mitigate their impact.
• Development of a High-skilled workforce: It will foster skills, “talent, and workforce development for the semiconductor industry.
• Level Playing Field: The agreement will “ensure a level playing field in the sector by sharing information on granted public subsidies.
• Encourage industry and stakeholder engagement: It will facilitate collaboration between Indian and EU stakeholders towards direct investments, joint ventures, and technology partnerships including manufacturing facilities.

Further Reading: Semiconductor Manufacturing, India’s First Semiconductor Memory Chip

Source: Financial Express