Centre’s Approval of New Chip Plant in Andhra Sparks Telangana’s Anger Over Alleged Bias

The Chip plant approval in Andhra Pradesh under the India Semiconductor Mission (ISM) has ignited a political storm, with Telangana accusing the Union government of favouring its neighbour despite Telangana’s readiness to host the project. The decision, announced by the Narendra Modi-led Union Cabinet, has been described by Telangana’s leadership as “a baffling display of bias” that undermines the state’s proactive industrial efforts.

The Project in Andhra Pradesh

The approved semiconductor manufacturing facility in Andhra Pradesh will be set up by Advanced System in Package (ASIP) Technologies in collaboration with South Korea’s APACT Co Ltd. The plant will have an annual capacity of 96 million units, producing components for mobile phones, set-top boxes, automobiles, and other electronic devices. This strategic investment is part of the government’s broader vision to strengthen India’s semiconductor ecosystem and reduce dependency on imports.

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While the Andhra Pradesh project is seen as a step towards advancing the nation’s chip manufacturing capabilities, critics note that crucial groundwork in the state remains incomplete — including land allocation. This has fuelled concerns over why the project was prioritised over states like Telangana, where preparations are reportedly far more advanced.

According to Babu, the designated company in Telangana was investment-ready, with all pre-conditions met except for final approval from the India Semiconductor Mission. This readiness, he argued, should have made Telangana a natural choice for the new semiconductor plant.

Allegations of Political Bias

Babu’s criticism reflects a larger sentiment within the Telangana government that the Centre’s industrial project allocations are influenced by political considerations rather than merit. Referring to the Chip plant approval in Andhra, he pointed out that not a single acre of land has been allotted for the project in Andhra Pradesh, while Telangana’s site was fully prepared.

This isn’t the first time Telangana leaders have accused the Union government of “step-motherly treatment.” In the past, they have raised similar concerns about the distribution of central projects, claiming that their state’s industrial potential has been overlooked despite strong investor interest and robust infrastructure.

Other Semiconductor Projects Approved

Alongside the Andhra Pradesh project, the Union Cabinet approved three other semiconductor initiatives: SiCSem and 3D Glass in Odisha, and CDIL in Punjab. These projects are expected to diversify India’s semiconductor capabilities, covering various technologies and regions. However, the decision to award Andhra Pradesh a facility despite its incomplete groundwork remains the most contentious point in the current debate.

The Bigger Picture for India’s Semiconductor Mission

The India Semiconductor Mission is a strategic initiative to position India as a global leader in electronics manufacturing. With increasing global demand for chips and the need for resilient supply chains, the mission aims to attract investment, boost domestic production, and create high-skilled jobs.

However, the uproar over the Chip plant approval in Andhra highlights the importance of transparent and merit-based selection processes. For India to achieve its semiconductor ambitions, ensuring fairness in project allocation will be as crucial as building technical capabilities.