Semiconductor – India Maps Long-Term Strategy to Strengthen Chip Industry
Semiconductor – India has unveiled a long-term vision to establish a strong position in the global semiconductor sector, with policymakers aiming to build a semiconductor value chain worth between USD 120 billion and USD 150 billion by 2035. The plan is designed to reduce dependence on imports, strengthen domestic capabilities, and increase India’s role in the international electronics ecosystem.
Roadmap Focuses on Industry Expansion
The strategy was detailed in a report released by the Frontier Tech Hub of NITI Aayog in May 2026. Titled “Future of India’s Semiconductor Industry,” the document presents a decade-long framework intended to shift India from a major consumer of semiconductor products to an important contributor across various stages of chip development and manufacturing.
The report follows the announcement of ISM 2.0 in the Union Budget 2026, reflecting the government’s intention to move beyond initial ecosystem development and focus on large-scale growth and capability enhancement.
Emphasis on Specialized Segments
Rather than competing directly with countries that dominate advanced semiconductor fabrication, the roadmap recommends concentrating on areas where India already has advantages. These include semiconductor design, packaging technologies, and other specialized segments that continue to witness strong global demand.
According to the projections outlined in the report, India could account for 10% to 13% of the worldwide semiconductor market by 2035. At the same time, the domestic market is expected to approach USD 200 billion in value. The roadmap also envisions meeting up to half of the country’s semiconductor requirements through local production while retaining a substantial share of value creation within India.
Ambitions in Packaging and Chip Design
The plan highlights India’s potential to become one of the world’s leading destinations for outsourced semiconductor assembly, testing, and advanced packaging services. It also seeks to strengthen capabilities in emerging technologies such as artificial intelligence, quantum computing, and high-performance computing through the development of more than 100 advanced semiconductor intellectual properties.
Speaking about the importance of the initiative, NITI Aayog Vice Chairman Ashok Kumar Lahiri noted that excessive reliance on imported technology can create long-term strategic vulnerabilities. He emphasized that technological independence must begin with critical infrastructure and foundational technologies.
Five-Pillar Framework Proposed
The roadmap is structured around five major themes: Pioneering, Policy and Investment, Production, People, and Partnership. These areas are intended to address key industry challenges, including high capital requirements, workforce shortages, and lengthy project timelines.
As part of innovation-focused initiatives, the report recommends financial support for Electronic Design Automation tools, creation of a national platform linking design and packaging activities, and the launch of an AI-enabled semiconductor engineering mission to accelerate chip development processes.
Investment Requirements and Manufacturing Plans
To achieve its goals, the report estimates that India will require investments ranging from USD 135 billion to USD 180 billion over the next ten years. It proposes government support of approximately USD 45 billion to USD 60 billion through a dedicated Semiconductor Support Fund, with the remaining capital expected to come from private investors and industry participants.
On the manufacturing front, the strategy prioritizes targeted expansion rather than replicating every aspect of the global supply chain. Focus areas include mature semiconductor nodes between 28 nm and 65 nm and specialized chips used in automotive systems, Internet of Things applications, and power management technologies.
The report also identifies opportunities in advanced materials such as Silicon Carbide and Gallium Nitride. Given the industry’s significant energy requirements, it recommends evaluating Small Modular Reactors as a possible power source for semiconductor manufacturing hubs.
Talent Development and International Cooperation
A major workforce development plan forms another key element of the strategy. The proposal includes a multi-level talent framework, establishment of a National Fab Academy, and curriculum upgrades aimed at preparing engineers and technicians for advanced semiconductor manufacturing environments.
The roadmap also stresses the importance of long-term cooperation with trusted partners, including the United States, the European Union, Japan, and South Korea. Such partnerships are viewed as essential for maintaining supply chain resilience and reducing risks arising from geopolitical tensions.
Reducing Import Dependence
India currently relies on imports for the vast majority of its semiconductor needs, creating economic and strategic concerns. Officials believe the new roadmap provides practical recommendations that can support the implementation of ISM 2.0 and help strengthen domestic capabilities.
NITI Aayog CEO Nidhi Chhibber said ongoing shifts in global supply chains and the growing China-plus-one approach have created a significant opportunity for India. She added that failing to capitalize on this moment could have implications not only for economic growth but also for national security and digital independence.