India earmarks $360M in support for chip venture

India approved $360 million in subsidies for a new chip assembly plant backed by Japan’s Mitsui & Co, Aoi Electronics, and local partner Kaynes Semicon. The facility will be built in Sanand, Gujarat, with operations targeted to start in the second half of 2026. Under the deal, Mitsui will have exclusive rights to handle raw materials procured by Kaynes from Japan-affiliated suppliers and will work with them to support the venture.

The funding comes under the Semicon India Programme, which has set aside INR760 billion ($8.2 billion) to build up the country’s semiconductor and display manufacturing base. So far, the government has cleared ten projects with planned investment of about INR1.6 trillion, including two fabrication plants and eight packaging facilities. Mitsui noted that Aoi Electronics is Japan’s largest semiconductor back-end process company, underlining India’s push to attract established foreign players into its chip ecosystem.