Modi’s $24 billion manufacturing push is stuck on the assembly line

A $10 billion push to make semiconductors in India is on shaky ground.

Its collapse will expose a major fault line in Prime Minister Narendra Modi’s campaign for greater economic self-reliance.

Already, influential critics are asking if the much-touted success in becoming a hub for smartphone manufacturing is a hollow claim. Low-end assembly-line jobs, created with the help of expensive state subsidies and protectionist import duties, would only make sense if they were a quick pathway to more sophisticated production, such as of microprocessors.

To that end, a likely rejection by the government of incentives for the 28-nanometer chip unit proposed by Indian billionaire Anil Agarwal’s Vedanta Resources Ltd. and Taiwan’s Hon Hai Precision Industry Co., also known as Foxconn, is not a good look.