India’s semiconductor sector is moving beyond policy discussions into concrete manufacturing investments. The country aims to transform from a chip consumer to a global contributor, backed by 76,000 crore government funding.
The semiconductor market in India, valued at $38 billion in 2023, is projected to reach $45-50 billion by 2025. Industry projections suggest growth to $100-110 billion by 2030, according to market research.
Strategic Advantage
Significant investments are reshaping India’s manufacturing landscape. Micron Technology committed 2,516 crore ($2.71 billion) for operations in Sanand, Gujarat. Tata Electronics and Power chip Semiconductor Manufacturing Corp announced a larger 9,000 crore ($10.96 billion) investment in Cholera, Gujarat.
These investments represent more than financial commitments. They signal India’s transition from policy formulation to the implementation phase, as reported in industry announcements.
India’s approach strengthens the entire chip-making value chain. The country hosts micro, small, and medium enterprises manufacturing precision components for wafer-processing equipment. The Production-Linked Incentive scheme supports semiconductor equipment manufacturers, enabling significant production scaling.
Why It Matters Now
Global uncertainty is reshaping digital priorities across nations. India’s push for self-reliance in AI hardware becomes crucial as supply chain vulnerabilities emerge worldwide.
The India Semiconductor Mission, launched in December 2021, provides targeted funding across three pillars: semiconductor fabrication, display manufacturing, and chip design. This initiative represents the government’s flagship effort to catalyse India’s emergence as an electronics powerhouse.
India’s talent advantage positions the country as a back-end powerhouse for research, design, and testing services. Over one million engineers skilled in AI, big data analytics, and cloud computing support operations from chip design verification to yield optimization.
Market Impact in India
The semiconductor strategy deliberately reinforces every link in manufacturing. India’s rich endowment of industrial chemicals, speciality gases, and minerals makes it a natural upstream supplier for chip fabrication.
Domestic producers are scaling capacity under government-backed incentives. Leading integrated service providers and independent design houses leverage local expertise, offering end-to-end solutions.
This positions India as an indispensable partner for global chipmakers looking to accelerate time-to-market, according to industry observers.
SEMICON India offers performance-linked grants, capital subsidies, and fast-track clearances. The India-US Initiative on Critical and Emerging Technology collaborates on joint research, workforce development, and supply-chain diversification.
What Business Leaders Should Know
The AI semiconductor market in India is projected to reach $21 billion by 2030, as reported in industry analysis. India hosts 20% of the global semiconductor design workforce, making it a talent powerhouse.
With the Make in India initiative, local chip fabrication and design are gaining traction. This reduces reliance on imports, where India currently depends on foreign sources for 95% of semiconductor requirements.
AI applications in healthcare, agriculture, and manufacturing require immense computational power. Advanced hardware like GPUs, TPUs, and custom AI chips accelerate training and deployment of complex models.
The rise of hardware manufacturing will generate high-value jobs including AI chip designers and semiconductor engineers. It will attract foreign investment, with companies showing increasing interest in India’s semiconductor landscape.
Experts argue that producing GPUs and AI chips locally aligns with self-reliance goals. This reduces supply chain vulnerabilities while fostering domestic innovation capabilities.
India’s semiconductor trajectory combines targeted policy incentives with strategic international partnerships. These initiatives demonstrate a balanced approach: attracting global technology partners while nurturing homegrown capabilities through well-calibrated incentives.
