India’s $13b semiconductor push targets chip self-reliance, global growth
- New Delhi bets on engineering talent to build a global semiconductor industry;
- Chip strategy shifts from ‘Make in India’ to ‘Engineer in India’
- Semiconductor ambitions grow as chip demand tops $200 billion by 2035
India’s India is committing US$13 billion to the second phase of its semiconductor mission as it seeks to build a domestic chip ecosystem spanning design, manufacturing, assembly and testing. The strategy is aimed at reducing the country’s heavy dependence on imported semiconductors while using its large pool of engineering talent to move higher up the global technology value chain.
The government has already approved 12 semiconductor projects across six states, with Micron, Kaynes Semicon and CG Semi beginning commercial production this year, mainly in assembly, testing and packaging rather than advanced wafer fabrication.
A Tata Electronics–Taiwanese Powerchip partnership in Dholera, Gujarat, is targeting its first chip output in December, while Tata has also signed an US$11 billion memorandum of understanding with ASML for advanced chipmaking serving industries including automobiles and artificial intelligence.
India’s challenge, however, extends beyond building factories. Analysts say a competitive semiconductor industry requires a complete ecosystem covering chip design, fabrication, assembly, testing, suppliers and skilled workers. Anndy Lian, a Singapore-based adviser on information technology systems, described building such an ecosystem as “a marathon, not a sprint”, arguing that downstream operations can be developed while major fabrication plants are still under construction.
Infrastructure will also be critical. Semiconductor manufacturing requires ultra-pure water, uninterrupted electricity and specialised chemicals, with even minor disruptions potentially damaging production. Lian said India needs industrial parks where utilities are guaranteed to international standards rather than simply promised.
India’s strongest advantage is its established position in semiconductor research and design. The country has a very large pool of chip-design engineers, but faces a shortage of fab-floor operators and process engineers needed to manage wafer production and convert raw silicon into functioning chips.
That talent base is increasingly becoming a central part of the government’s strategy. Information Technology Minister Aswini Vaishnaw said India aims to develop 100,000 semiconductor engineers, while 85,000 have already been trained in four years, compared with an original 10-year target.
Semiconductor design programs are now available at 355 universities, including institutions in smaller cities and towns. At the same time, the global industry is projected to face a shortage of about 1 million workers by 2032, potentially giving India a significant workforce advantage.
The economic stakes are substantial. India currently imports 90–95 percent of its semiconductors, according to a May report by government think tank NITI Aayog, while domestic demand is projected to exceed US$200 billion by 2035. Reducing that dependence is therefore both an industrial objective and a strategic priority.
To attract investment, the federal government offers subsidies covering up to 50 percent of semiconductor manufacturing project costs, with additional support available from state governments.
India is not initially trying to match the United States, China and Taiwan in the race for the most advanced chips. Raj Kapoor, founder and CEO of India Blockchain Alliance, said the country appears to be prioritising chips where demand remains substantial and barriers to entry are lower.
He said the Tata-ASML agreement demonstrates ambitions for advanced manufacturing, but the longer-term test will be whether India can convert such partnerships into broader technological capabilities.
Economics professor Sunil Sinha said the issue is not simply how many chips India produces, but what generation of chips it can manufacture and whether they are capable of supporting technologies such as AI. Even production of more basic chips, he noted, could deliver significant economic benefits by reducing the need for domestic industries to rely on imports.
For India, the larger ambition is therefore moving beyond “Make in India” to “Engineer in India” — using its engineering workforce as the foundation for a complete semiconductor ecosystem. The success of the strategy will ultimately depend on whether that talent can be matched with the manufacturing skills, infrastructure, technology and industrial networks required to produce chips competitively.
