India is rapidly advancing its dual-track initiative in semiconductors and AI, securing billions in investments, expanding domestic capabilities, and aiming to carve a significant role in global supply chains amid increasing technological competition.
India is accelerating a two-track push on semiconductors and artificial intelligence, aiming to reduce dependence on imported technology while building a larger role in global chip and AI supply chains. According to official government material and industry reports, the strategy has shifted from policy design to execution, with new manufacturing capacity, domestic chip design and AI infrastructure moving forward in parallel.
On the semiconductor side, the government says 12 projects have been approved across six states, with investment commitments exceeding Rs 1.64 lakh crore, and three plants have already started commercial output. The first phase of the programme, Semicon 1.0, carried an allocation of Rs 76,000 crore, while Semicon 2.0 was approved in July 2026 with a budget of Rs 1,27,500 crore to widen support for design, fabrication, equipment, materials, advanced packaging, research and talent development, according to the Prime Minister’s Office and Business Standard.
The new phase is intended to strengthen the full chip value chain rather than focus only on fabrication. India Briefing said the programme is meant to attract global semiconductor companies, equipment suppliers and technology groups into local manufacturing and supply-chain work. The government has also expanded design capability through the Chips to Startup scheme, with electronic design automation tools deployed across 320 academic institutions and more than 68,000 students trained, alongside financial support for 24 design projects and tool access for 105 start-ups and small firms.
Artificial intelligence is advancing alongside that industrial plan. The IndiaAI Mission, approved with about Rs 10,372 crore, has expanded shared compute capacity to more than 45,000 graphics processing units by June 2026, while 237 projects had used subsidised compute by August, according to official figures. The government has also backed 20 indigenous foundation model proposals, built out the AI Kosh data platform and supported AI use in public institutions. At the same time, India is widening research capacity through AI centres of excellence and technology hubs, while also promoting responsible AI work on deepfakes, bias, privacy and explainability. The broader ecosystem has won international attention, with Stanford ranking India third in AI competitiveness and the country becoming the second-largest contributor to GitHub AI projects in 2025, according to the report.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
