Semiconductors are essential for all modern electronics—from smartphones and computers to defence systems and automobiles. India has a large consumer base and growing digital infrastructure but lacks an established chip manufacturing ecosystem. Developing this capability is necessary for technological self-reliance, national security, and reducing import dependency, especially as global supply chains become more uncertain.
India launched a ₹76,000-crore semiconductor incentive programme to support projects across the value chain—design, fabrication, packaging, and testing. Additionally, a ₹22,919-crore electronics manufacturing scheme aims to boost local production of components. These policies are designed to position India within the global chip ecosystem, not just meet domestic demand.
Five major semiconductor projects worth ₹1.5 lakh crore have been approved. These include investments by Tata Electronics, Micron, and CG Power. About ₹60,000 crore from the incentive fund has been allocated. These projects span the entire value chain and signal growing international confidence in India’s potential to be a global semiconductor hub.
Critics often argue that weak domestic demand undermines the case for semiconductor manufacturing. But this overlooks a crucial point: like the Production Linked Incentive (PLI) scheme for smartphones, which led to export-led success, the semiconductor strategy is also globally aligned. The goal is to integrate into global value chains, not rely solely on domestic consumption.
Yes. The smartphone PLI scheme, though not export-led on paper (due to WTO rules), has successfully attracted global players like Apple. Within four years, India now produces 20% of the world’s iPhones, with 80% of that output being exported. Apple and Tata’s new project to manufacture $12 billion worth of semiconductors by 2026 reflects strong global interest and domestic capability.
The biggest challenge is the limited production of electronic components, which weakens backward integration. While final assembly has grown, the absence of a strong components industry remains a gap. Also, attracting high-tech global partners for fabrication units requires trust, long-term commitment, and a clear policy environment.
According to the IT Ministry, software-led chip design is a critical focus area. India already has a large talent pool in electronics design automation (EDA) and embedded systems. Strengthening chip design capabilities will complete the loop of vertical integration and make India a key contributor in the semiconductor innovation cycle.
The government is actively working on:
Semiconductors are critical for many sectors:
India’s large industrial base provides a strong foundation for chip demand.
India’s semiconductor journey is still in its early stages. However, the policy vision is sound, investments are flowing in, and global interest is rising. With continued focus on ecosystem-building—component manufacturing, chip design, talent development, and global partnerships—the dream of becoming a semiconductor powerhouse remains realistic.
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