India-Singapore MOU: A Strategic Dawn for the Southeast Asia
Hon. Prime Minister Narendra Modi ’s recent visit to Southeast Asia brought a new wave of optimism, marking a significant step in India’s geopolitical and economic strategy.
This marked the PM’s fifth visit to the island nation, and the focus was clear—strengthening ties through technology, skill development, and semiconductors.
This visit underscores India's drive to become a global semiconductor hub, with Singapore emerging as a vital partner in this ambition. The significance of the Memorandum of Understanding (MoU) on the India-Singapore Semiconductor Ecosystem Partnership highlights India's determination to establish a foothold in this cutting-edge industry.
Among the promising players in the semiconductor landscape are trailblazing startups such as Saankhya Labs Pvt Ltd , Mindgrove Technologies and Terminus Circuits Pvt Ltd . These companies, alongside, FermionIC Design , and Oakter - Consumer Brand by RIOT Labz , are laying the groundwork for a robust semiconductor ecosystem.
Before we ascertain India's role in the semiconductor industry, let's analyse the India-Singapore MOU from the broadest perspective.
The Semiconductor Gold Rush
Semiconductors are the backbone of modern technology, powering everything from smartphones to sophisticated defence systems. The importance of chips cannot be overstated, especially as geopolitical tensions and supply chain disruptions during the COVID-19 pandemic exposed vulnerabilities in the global semiconductor supply.
India, a late entrant in this high-stakes race, sees semiconductors as a critical element of its technological and economic future. The collaboration with Singapore, a country with a well-established semiconductor industry, offers India a golden opportunity to leapfrog into the global arena.
"Make in India" Semiconductor Push
India’s ambition to build a semiconductor ecosystem began in 2021 with the launch of the India Semiconductor Mission, backed by a substantial ?76,000 crore incentive scheme. The mission aims to develop semiconductor manufacturing capabilities, with the Indian government offering significant subsidies—covering up to 50% of the capital costs for setting up chip fabrication plants.
Key steps in this mission include:
These initiatives demonstrate India’s determination to build domestic capabilities, lessening its dependency on global suppliers. The collaboration with Singapore is a crucial step towards this goal, offering India access to the knowledge and expertise of a country that has long excelled in this industry.
What India Can Learn From Singapore’s Semiconductor Success Story?
Singapore’s semiconductor industry is one of the world’s most advanced, thanks to the early vision of its first Prime Minister, Lee Kuan Yew.
In the early 1970s, Lee foresaw the potential of semiconductors to create jobs and drive economic growth, laying the foundation for an industry that now accounts for:
Singapore’s growth model, which combines infrastructure, business-friendly policies, and investment in human capital, holds important lessons for India.
Its Wafer Fab Parks spread over 374 hectares, offer customised infrastructure for semiconductor firms, while universities collaborate with industry leaders to develop specialised talent in microelectronics and integrated circuit design.
This strategic approach has allowed Singapore to attract nine of the world’s top 15 semiconductor firms, solidifying its role as a major player in the global semiconductor supply chain.
Opportunities for India
While Singapore’s semiconductor industry is focused on mature-node chips used in industries like automotive and industrial equipment, it offers a rich source of knowledge. New Delhi views Singapore as a key partner in talent development and infrastructure management. The prospect of collaboration in these areas could significantly accelerate India’s progress.
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India has several advantages that make it an attractive destination for semiconductor companies:
Global Challenges and Opportunities
Despite Singapore’s success, the global semiconductor industry faces challenges. Increasing production costs, limited land, and labour shortages are pushing some semiconductor companies to diversify their operations to lower-cost regions.
Singapore’s reluctance to offer incentives seen in other countries may lead companies to look elsewhere, presenting an opportunity for India to attract investment.
The geopolitical landscape also plays a role in shaping the semiconductor industry’s future. The ongoing US-China rivalry has heightened the global focus on supply chain resilience and de-risking strategies, positioning Singapore and potentially India as safe sanctuaries for semiconductor production.
Key recent developments include:
These developments reflect Singapore’s continued relevance in the semiconductor space but also point to opportunities for India to position itself as a complementary player in the global chip supply chain.
Singapore’s Strategic Expansion Beyond ASEAN and China
As multinational corporations seek to diversify their international trade and investments, Singaporean businesses are following suit, with a growing curiosity about opportunities beyond ASEAN and China.
A new wave of global expansion beckons, with untapped markets like India and the Middle East offering rich prospects for Singaporean enterprises.
Recognising the need for support in navigating these new markets, the Singapore Business Federation (SBF) has teamed up with 汇丰 to assist local businesses in expanding their footprints overseas. The focus is on major trade corridors, including India and the Middle East, rapidly emerging as some of the world’s most promising economies.
Amid shifting supply chains and geopolitical tensions, India and the Middle East are becoming key players in global trade and technology. Together, these regions represent nearly a quarter of the global population and are undergoing rapid urban and industrial transformation.
Growth Areas Include:
One of the success stories is a Singapore-based tech start-up Crayon Data , an inspiring example of how businesses can succeed in a market like India with the right support. With a centre of excellence in India, Crayon Data’s tech, data, and engineering team has developed innovative artificial intelligence products.
ViTWO's Final Thoughts: Strengthening the India-Singapore Semiconductor Partnership
The India-Singapore semiconductor partnership represents a vital step in India’s quest to become a self-reliant technological powerhouse. While challenges remain—especially in developing high-end logic chips and scaling production—collaborations like this offer a promising path forward.
As India continues to invest in its semiconductor ecosystem, learning from Singapore’s experience in talent development, infrastructure management, and supply chain resilience will be essential. By leveraging its unique advantages and fostering global partnerships, India can build a semiconductor industry that not only meets domestic demand but also leverages the critical role of Indian MSMEs in the global semiconductor market.