Mains Practice Questions for the Day
- Q. Establishment of semiconductor fabrication plants is crucial for India’s technological and economic security. Examine in the context of India’s first chip fabrication plant at Dholera. (15 M)
- Q. India’s response to the oil shocks of 1973 and 1979 highlights the importance of energy security in national economic planning. Examine with lessons for the present West Asia crisis. (15 M)
Q. Establishment of semiconductor fabrication plants is crucial for India’s technological and economic security. Examine in the context of India’s first chip fabrication plant at Dholera. (15 M)
(GS Paper III – Science & Technology | Economy | Infrastructure)
Introduction:
India has notified its first semiconductor fabrication plant at Dholera SEZ, Gujarat, marking a significant step toward building domestic chip manufacturing capacity. In a world increasingly driven by digital technologies, semiconductors have emerged as critical strategic assets, making this development crucial for India’s technological sovereignty and economic resilience.
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1.Semiconductor Fabrication Plant (Fab)
- A semiconductor fab is a highly sophisticated manufacturing facility where integrated circuits (chips) are produced.
- It uses materials like silicon through complex processes such as doping and lithography.
- These chips form the backbone of modern electronics, powering devices from smartphones to defence systems.
2.Significance of Dholera Fab for India
- The establishment of the Dholera fab strengthens strategic autonomy by reducing dependence on imports, particularly from East Asia.
- It also enhances India’s position in global supply chains, which have become vulnerable due to geopolitical tensions.
- Further, it promotes high-value manufacturing, generates skilled employment, and catalyses the development of an indigenous electronics ecosystem.
3.Economic and Industrial Impact
- With an investment of around ₹91,000 crore, the project is expected to create a strong multiplier effect by boosting ancillary industries such as chip design, packaging, and testing.
- It aligns with initiatives like Make in India and Production Linked Incentive (PLI) schemes, thereby accelerating industrial growth and attracting foreign investment in high-tech sectors.
4.Strategic and National Security Dimensions
- Semiconductors are critical for defence, telecommunications, artificial intelligence, and critical infrastructure.
- Domestic manufacturing reduces vulnerability to supply disruptions and technological dependence, ensuring national security in an era of technological competition.
5.Challenges in Semiconductor Manufacturing
- Semiconductor fabrication is capital-intensive and technology-intensive, requiring advanced machinery, skilled workforce, and reliable supply chains.
- India faces challenges such as high initial costs, lack of ecosystem maturity, dependence on imported equipment, and intense global competition from established players like Taiwan and South Korea.
Conclusion:
The Dholera semiconductor fab represents a transformative step toward making India a global electronics manufacturing hub. However, sustained policy support, ecosystem development, and technological capability building are essential to convert this initial milestone into long-term strategic advantage.
Q. India’s response to the oil shocks of 1973 and 1979 highlights the importance of energy security in national economic planning. Examine with lessons for the present West Asia crisis. (15 M)
(GS Paper III – Economy | Energy Security | International Relations)
Introduction:
India, as the world’s third-largest consumer of crude oil, remains highly vulnerable to global oil disruptions due to its heavy import dependence of over 88%. The 1973 and 1979 oil shocks demonstrated how geopolitical conflicts in West Asia can directly affect India’s economy, making energy security a central pillar of national planning even today.
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1.The 1973 Oil Crisis and Its Impact on India
- The 1973 Arab-Israeli War led Arab members of OAPEC to impose an oil embargo on countries supporting Israel, sharply reducing global supply.
- Oil prices surged significantly, causing India’s oil import bill to rise from nearly $500 million in 1973 to $1.3 billion in 1974.
- Inflation increased sharply, fertilizer shortages affected agriculture, and economic growth slowed due to rising production costs and import pressure.
2.The 1979 Oil Crisis and Its Economic Consequences
- The Iranian Revolution disrupted nearly 7% of global oil production, pushing crude prices from around $13 per barrel to $34 per barrel by 1980.
- India faced severe balance of payments stress and had to approach the IMF for assistance.
- This external vulnerability exposed structural weaknesses in the economy and indirectly contributed to later economic reforms and liberalisation.
3.How India Managed These Crises
- India adopted demand compression measures, controlled petroleum consumption, and increased focus on domestic coal production to reduce dependence on imported oil.
- Import diversification was gradually pursued, while public sector energy planning was strengthened.
- The crises also pushed policymakers to treat energy security as part of economic sovereignty rather than only a trade issue.
4.Present-Day Relevance in the West Asia Crisis
- The ongoing US-Israel-Iran conflict again exposes India’s vulnerability, especially as a large share of crude imports passes through the Strait of Hormuz.
- Rising import dependence, global price volatility, and supply chain disruptions threaten inflation, fiscal stability, and current account balance.
- Strategic Petroleum Reserves (SPR) and supplier diversification have improved preparedness, but risks remain high.
5.Lessons for Long-Term Energy Security
- India must accelerate diversification of suppliers, expand renewable energy capacity, strengthen SPR reserves, and reduce excessive oil dependence through electric mobility and green hydrogen.
- Domestic production, energy efficiency, and resilient maritime supply chains are equally important to reduce vulnerability to external geopolitical shocks.
Conclusion:
The oil shocks of 1973 and 1979 proved that energy crises are not merely economic disruptions but strategic national challenges. In the current volatile global environment, India must move from crisis management to long-term energy resilience by combining diversification, domestic capacity building, and clean energy transition for sustainable security.
