New Delhi, Sep 9: India is stepping up its efforts to build a strong domestic semiconductor industry as the country looks to reduce import dependence, attract high-value investments and strengthen its position in the global electronics supply chain.
At the centre of this effort is the government’s Semicon 2.0 programme, with an outlay of around ₹1.27 lakh crore. The programme is designed to expand India’s capabilities across the semiconductor value chain, covering chip manufacturing, packaging, equipment, materials, design and related technologies.
The focus is significant for India because semiconductors are now essential to a wide range of industries. Smartphones, automobiles, telecom equipment, consumer electronics, defence systems, electric vehicles and artificial intelligence applications all depend on chips. Building a stronger domestic ecosystem can therefore help Indian companies secure critical supplies while reducing exposure to disruptions in international markets.
India has already built a strong base in semiconductor design and technology services. The next challenge is to develop deeper manufacturing capabilities within the country. Semicon 2.0 is aimed at addressing this gap by supporting not only chip fabrication but also the equipment, materials and other specialised activities required to create a complete ecosystem.
The programme could create opportunities for a wide range of businesses. Semiconductor companies will form one part of the ecosystem, while engineering firms, equipment manufacturers, chemical suppliers, electronics companies, technology startups and research organisations can also benefit from the expansion of domestic production.
The growth of semiconductor manufacturing is already creating new industrial clusters. Gujarat’s Sanand, for example, has emerged as an important semiconductor manufacturing location, with new investments in chip assembly and related activities.
For Indian manufacturers, a stronger local semiconductor supply chain could improve access to critical components and reduce some of the risks associated with overseas sourcing. It could also encourage electronics companies to increase local production and gradually raise the share of value generated within India.
The semiconductor push is expected to have an employment impact as well. Semiconductor fabrication, packaging, equipment manufacturing and research require engineers, technicians, designers and other specialised professionals. This could increase demand for highly skilled talent while creating opportunities for training institutions and technology-focused startups.
The business opportunity extends beyond manufacturing chips. Developing a semiconductor ecosystem requires advanced machinery, specialised materials, testing facilities, clean-room infrastructure, software and research capabilities. Building these supporting industries will be important if India wants to become a competitive global semiconductor destination.
At the same time, developing a semiconductor industry is a long-term process that requires significant capital, advanced technology and specialised expertise. Indian companies will also need to meet global standards on quality, reliability and production efficiency to compete with established manufacturing hubs.
The government has therefore increasingly shifted its focus from simply attracting individual semiconductor projects to building a broader ecosystem. Industry reports indicate that the next phase of India’s semiconductor strategy is placing greater emphasis on materials, equipment, intellectual property and supply-chain resilience.
For India, the objective is not to completely separate itself from global supply chains. Instead, the larger goal is to build enough domestic capability to become a reliable part of the global semiconductor network while reducing excessive dependence on imports for strategically important technologies.
With demand for chips expected to rise across automobiles, electronics, telecom, artificial intelligence and industrial technology, India’s semiconductor strategy could become an important part of its wider manufacturing ambitions. If investment, skills and infrastructure develop as planned, the sector can support new businesses, skilled employment and higher-value manufacturing.
India’s semiconductor push is therefore moving beyond the idea of simply making chips domestically. The larger ambition is to create a complete business ecosystem that can support innovation, manufacturing, exports and long-term technological growth, helping India become a more competitive player in the global electronics industry.