India is quickly establishing itself as a semiconductor player in the global technology sector.
India is quickly establishing itself as a semiconductor player in the global technology sector. Prime Minister Narendra Modi, in his Independence Day speech on 15 August pointed out that India is now on "mission mode" to become capable of producing its first Made-in-India semiconductor chip by the end of the current year. This ambitious project falls under the overall India Semiconductor Mission (ISM), targeting reducing India's dependence on imports and promoting self-reliance in the high-tech industry.
Semiconductors are the foundation pillars of modern technology. Small chips control the operation of electronic devices, thereby making them vital in sectors ranging from consumer electronics to sophisticated defence systems. India currently imports almost all its semiconductor chips, which makes it vulnerable in its most critical supply chains. This dependence was apparent during the COVID-19 crisis and the ongoing tensions in global geopolitics.
The Indian government has set out a strategic vision in the form of the India Semiconductor Mission (ISM), which was approved in December 2021 with a budgetary allocation of Rs 76,000 crore.
In recent months, the government has taken major decisions to speed up the development in this sector. On 12 August 2025, the federal cabinet approved fresh semiconductor production units in Odisha, Punjab, and Andhra Pradesh with a total investment of Rs 4,600 crore. The units will provide thousands of skilled jobs and position India as a critical pillar of the semiconductor chain. For example, the establishment of a Silicon Carbide (SiC) compound semiconductor plant in Odisha will position India as a leader of state-of-the-art chip technologies with possibilities in defence, electric vehicles, and green energy.
India's push towards frontier semiconductor manufacturing also includes the opening of world-class chip design centers at Noida and Bengaluru, in bleeding-edge 3-nanometer chip designs. It is India's first foray into the next level of semiconductor technology, one which is currently monopolised by countries like Taiwan and the United States.
While India's efforts to build its semiconductor ecosystem are laudable, there are a few challenges to be overcome. The first is the underdevelopment of the supply chain. From raw material to specialised equipment, India needs to create an infallible infrastructure that can support mass-scale production of semiconductors. Second, India lacks experience in trained professionals who have studied semiconductor design and manufacturing.
Another such challenge is international competition. Taiwan, South Korea, and the United States have already established a solid grip on semiconductor production, and strategy in terms of technology and scale is required for India to keep up.
The semiconductor sector in the country also needs to overcome large policy and logistics barriers such as land acquisition, regulations, and foreign investment.
However, with the ISM, the government has created a favourable ecosystem for semiconductor startups and high-ticket investments. In a bid to attract foreign investment, India is offering various incentives like tax relief and land grants. Already, Micron Technology and Tata Electronics have pledged to set up fabrication plants in Gujarat and Assam. The investments are crucial in setting the foundation for India's semiconductor economy.
With continued government support, industry collaboration, and a keen focus on innovation, India can reduce its import dependence and create a competitive semiconductor industry. As Prime Minister Modi said, India is mission mode, and the first Made-in-India semiconductor chip will soon become a reality, paving the way for a new era of technology development and economic growth.
(Pranay Tiwary is a communications and technology expert)
