'Made in India' chips may become mandatory for Defence

Officials say that the government is aware that 'made in India' chips and electronics are necessary in national interest, given the dependence currently India has on imported products that can be rigged and bugged.

NEW DELHI: India is considering a proposal to make it mandatory for the strategic sectors of Defence, Space and Atomic Energy to use 'made in India' chips in an initiative that will meet not only national security needs but also kick start the domestic semi-conductor manufacturing business that has been struggling to take off.

Sources said that preliminarily talks on the matter have already taken place and a meeting that included top government representatives from the strategic departments of space, atomic energy, information technology and defence research took place at the Niti Aayog recently.

At the heart of the issue is the setting up of two semi-conductor fabrication facilities in India that were cleared by the UPA government in 2013 but have still not taken off given a lack of direction and government support for the very high investment units.

Officials say that the government is aware that 'made in India' chips and electronics are necessary in national interest, given the dependence currently India has on imported products that can be rigged and bugged.

"There is a fear of overdependence on foreign sources for such a vital thing. Cases of spurious and even suspicious electronic parts from abroad have come to light, making it necessary for at least the core strategic sectors to have an Indian option," an senior official told ET.

Officials have also identified cybersecurity at a key area where India made chips can be encouraged, given that it falls within the purview of the government. By most estimates, the strategic electronics industry in India is worth over Rs 12,000 crore annually and growing.

"It is clear that the semi-conductor industry has to stand up on its own and be competitive. However, the industry will never take off on its own due to the global competition. Encouragement in the form of a firm, committed market will be useful in starting the industry," the senior official said.