India’s semiconductor journey has moved from policy foundations to actual chip production within just four years. In December 2021, the Government approved SEMICON 1.0 with an outlay of ₹76,000 crore, laying the groundwork for a domestic semiconductor and display manufacturing ecosystem.

By 2026, twelve semiconductor units had been approved, five of which commenced commercial production, marking India’s entry into chip manufacturing.

SEMICON 1.0 introduced schemes for setting up Semiconductor Fabs, Display Fabs, Compound Semiconductors, Silicon Photonics, Sensors and ATMP/OSAT facilities. It also launched the Design Linked Incentive Scheme to strengthen chip design capabilities.

These initiatives enabled India to approve twenty-four chip design projects worth ₹900 crore, provide advanced design tools to more than 1 lakh engineers across 500 organisations, and develop over 300 chip designs.

India also signed semiconductor cooperation agreements with the United States, Japan, the European Union, Singapore and the Netherlands, and joined Pax Silica in February 2026. By this stage, India hosted 7% of global semiconductor capability centres and employed nearly 20% of the world’s chip design workforce.

Building on this foundation, the Union Cabinet approved SEMICON 2.0 on 15 July 2026 with an outlay of ₹1,27,500 crore. Unlike the first phase, which concentrated on fabs and packaging, SEMICON 2.0 expands into six strategic pillars: research and development, chip design, machines and materials, new fabs, advanced packaging and talent development.

This comprehensive approach aims to build the entire chip value chain within India, positioning the country as a trusted global semiconductor hub and advancing the vision of Viksit Bharat.

The importance of semiconductors is underscored by their role in powering Artificial Intelligence, telecommunications, electric mobility, defence, advanced manufacturing, IoT, 5G/6G, data centres and autonomous vehicles.

The global semiconductor market grew at a CAGR of 6.5% between 2014 and 2024 and is projected to grow at 8.5% over the next decade. India’s semiconductor demand is expected to reach $110 billion by FY2030 and exceed $200 billion by FY2035. Imports between FY17 and FY25 amounted to nearly $150 billion, growing at a CAGR of 23%. If unchecked, annual imports could reach $240 billion by 2035, making domestic manufacturing an urgent priority.

SEMICON India 2026, themed ‘Silicon to Systems: Building the Ecosystem,’ was inaugurated by Prime Minister Narendra Modi at Yashobhoomi, New Delhi, on 17 September 2026. The event, held from 17 to 19 September, brought together global industry leaders, policymakers, investors, academia and Start-Ups to strengthen India’s semiconductor ambitions.

It showcased the entire value chain, from silicon purification to chip packaging, and highlighted India’s emerging capabilities across design, manufacturing, materials and talent.

India’s strategic missions already rely on indigenous chips. The Semiconductor Laboratory in Mohali develops flight-grade chips for satellites and launch vehicles. Chandrayaan-3’s lander carried an Indian-made camera chip, while the Vikram processor is used in rockets. Aditya-L1 employs radiation-hardened ADC chips developed domestically. These achievements demonstrate India’s ability to produce chips for critical applications.

SEMICON 2.0 is supported by a progressive policy ecosystem. The National Policy on Electronics 2019 established the framework for Electronics System Design and Manufacturing. SPECS 2020 incentivised domestic manufacturing of components and semiconductors.

EMC 2.0 supported infrastructure for electronics manufacturing. The Production Linked Incentive Schemes for electronics and IT hardware boosted domestic production of mobile phones, laptops, tablets and servers.

The Electronics Components Manufacturing Scheme 2025, with an outlay of ₹40,000 crore, further strengthened component manufacturing.

The Mobile Phone Manufacturing Scheme 2026 aimed to enhance competitiveness and domestic value addition. Research, Development and Innovation Schemes under SEMICON 2.0 supported eligible projects, while 100% FDI policy facilitated global investment and partnerships.

By 2026, India had moved from having no commercial chip plant to approving twelve units, with five already in production. Students across hundreds of colleges were designing chips, and engineers were gaining access to advanced tools.

SEMICON 2.0 does not start afresh but builds upon this functioning ecosystem, adding machines, materials, design, research and talent to fabs and packaging. The road ahead is demanding, as chip manufacturing is among the most complex industries in the world, requiring precision and long-term policy support.

Yet, the gains will be significant. Devices will be manufactured more fully within India, critical systems will depend less on distant supply chains, and young engineers will find high-value work closer to home. A small chip carries a large promise, and India has resolved to build it at home.

Agencies