India is set to raise the issue of sustainable global supply chains at the G-20 summit in Rome, as the semiconductor chip shortage has dented the hope of economic revival anytime soon.
Responding to Sputnik, Indian Foreign Secretary Harsh Vardhan Shringla said that Prime Minister Narendra Modi would raise the chip shortage issue during his meetings with leaders in Rome.
“The idea is to try and ensure that there is a greater preparedness for meeting such situations through greater collaboration with our main partners and the international community,” Shringla said.
Prime Minister Modi had raised the issue in the past in other meetings that India has had at the summit level. “We will continue to advocate this in our various meetings that we will have,” Shringla added.
During Modi’s visit to the US in September, the “talk of the issue of resilient, sustainable, secure, stable supply chains” was taken up and was discussed extensively with Quad partners.
Quad partners, the US, Japan, Australia, and India, have agreed to launch a joint initiative to map capacity, identify vulnerabilities, and bolster supply-chain security for semiconductors and their vital components.
“This initiative will help ensure Quad partners support a diverse and competitive market that produces the secure critical technologies essential for digital economies globally,” the joint statement issued after the Quad’s first in-person summit on 24 September read.
Besides the surge in sales of electronic items during the pandemic, the trade tensions between the US and China have also fuelled the chip shortage.
India is more worried about the disruption in the supply of semiconductors, as 40% of all foreign direct investment since 2000 has flowed to electronics, electrical machinery, and telecommunications. India’s electronics manufacturing has witnessed a 24% annual growth rate in the last five years.
One of the biggest job creators in the Indian economy, the auto sector, has recorded a fall of around 40% in monthly sales in September. India’s semiconductor demand stands at approximately $24 billion and is expected to reach $100 billion by 2025.