The border skirmishes between India and China last year set many things in motion — they led to the ban of several Chinese apps in the country, caused the revival of a homegrown smartphone company, and augmented the Make in India initiative (and aatmanirbharta) that encourages companies to do their manufacturing in the nation. Following the integral role the initiative has already played in making the country the second-largest smartphone manufacturer in the world, the government now intends to draw in chipmakers with a lucrative offer.

According to a report by ReutersIndia is ready to offer cash incentives of more than $1 billion to every company that sets up chip fabrication infrastructure in the country. A future mandate will also apparently make it mandatory for private companies in India to source their purchasing from these firms — and the government will also be a buyer. The report doesn't reveal whether this incentive has attracted the eyeballs of any major semiconductor manufacturers yet.

Wafer fabrication is a tedious, time-consuming, and expensive process, requiring billions of dollars in R&D. For context, the 3nm fab being developed by TSMC is expected to cost upwards of $20 billion. India currently doesn't have a commercial fab that can tend to the needs of modern-day computing devices like smartphones — current facilities can only offer up to 180nm chips.

If India wants to be self-reliant in producing smartphones and cut its dependence on imports, attracting investments from chipmakers is crucial. Whether a billion dollars in incentives will be enough for them to go all-in remains to be seen.