India's Semiconductor Future Development

India Semiconductor Mission Overview

Government Initiatives:

• Semicon 1.0 and 2.0:
  • Semicon 1.0: Launched in December 2021 with an allocation of ₹76,000 crore to establish a domestic semiconductor and display manufacturing ecosystem.
  • Semicon 2.0: Approved on July 15, 2026, with a budget of ₹1,27,500 crore, focusing on enhancing capabilities across six strategic pillars:
    1. Research and Development
    2. Chip Design
    3. Machinery & Materials
    4. Establishment of more fabs
    5. Talent Development
    6. Strengthening the ATMP/OSAT industry.

Economic Data:

• Global Semiconductor Market Growth: Projected CAGR of 6.5% from 2014-2024, expected to rise to 8.5% over the next 5-10 years.
• India's Semiconductor Demand: Estimated to reach $110 billion by FY2030 and exceed $200 billion by FY2035.
• Import Expenditure: India spent approximately $150 billion on semiconductor imports from FY2017 to FY2025, with a CAGR of 23%. If trends continue, by FY2035, annual imports could reach $240 billion.

Strategic Importance:

• Semiconductors are critical for modern technologies including AI, telecommunications, electric mobility, defense, and advanced manufacturing.
• They enable innovations in IoT, 5G/6G, data centers, and autonomous vehicles.
• The geopolitical landscape has highlighted risks in supply chains, prompting major economies to bolster domestic semiconductor capabilities.

Judicial and Legislative Framework:

• The National Electronics Policy (NPE) 2019 and subsequent schemes (e.g., Production Linked Incentives (PLI)) promote electronics and semiconductor manufacturing.
• Electronics Manufacturing Policy: Aims to create a robust ecosystem for manufacturing electronic components and semiconductors.

International Collaborations:

• India has engaged in semiconductor collaborations with the USA, Japan, EU, Singapore, and the Netherlands.
• A joint declaration on semiconductor ecosystem partnership was signed with Germany during Chancellor's visit in January 2026.

Technological Developments:

• Semiconductor Laboratory (SCL), Mohali: Develops space-grade chips for satellites and space missions.
• Chandrayaan-3: Featured an Indian-made camera chip for its imaging systems.

Key Achievements under Semicon 1.0:

• Approval for 12 semiconductor manufacturing units with a proposed investment of over ₹1.64 lakh crore.
• Five units have commenced commercial production.
• 24 chip design projects approved, valued at approximately ₹900 crore.
• Over 500 organizations and 1 lakh engineers are now engaged in advanced chip design.

Future Outlook:

• The focus is on building a comprehensive semiconductor ecosystem from raw materials to finished chips.
• Aiming for strategic autonomy and high-value employment opportunities within India.
• Continuous policy support will be crucial for sustaining growth in the semiconductor sector.

Constitutional References:

• The initiatives align with the Directive Principles of State Policy (DPSPs) promoting economic development and self-sufficiency.

Conclusion

India's semiconductor mission is pivotal for technological self-reliance and economic growth, positioning the country as a global semiconductor hub by strengthening domestic capabilities and fostering international collaborations.