India’s semiconductor strategy is shifting from focusing solely on fabrication plants to developing a full-spectrum industrial ecosystem, encompassing design, packaging, R&D, and talent, with strong international interest and government backing.
India’s semiconductor push is moving beyond the narrow goal of attracting fabrication plants and towards something more ambitious: a full industrial ecosystem. According to The Economic Times, the emphasis is now on design, packaging, equipment, materials and skilled labour, rather than on fabs alone.
That shift was reinforced at SEMICON India 2026, where Prime Minister Narendra Modi said the country’s chip industry had moved from plans into actual manufacturing. He also urged the private sector to step up research and development spending, arguing that a serious semiconductor base requires several layers of capability to develop at the same time.
The broader industrial backdrop is already visible in electronics manufacturing. Government figures cited by The Economic Times show electronics output rising from ₹1.9 lakh crore in 2014-15 to ₹13.11 lakh crore in 2025-26, while exports climbed from ₹38,000 crore to ₹4.24 lakh crore. Mobile phone production has expanded sharply too, and smartphones have become India’s largest single export item in FY26.
That momentum has changed India’s position in the market. The country now makes 99.2% of the mobile phones it consumes, according to the same reporting, and the mobile ecosystem supports 12 lakh jobs, with the wider electronics sector employing 25 lakh people. The production-linked incentive scheme has also been a major driver, helping to catalyse about ₹96,000 crore in investment in mobile manufacturing.
Policy has followed the manufacturing base. The first SEMICON India programme was cleared with an outlay of ₹76,000 crore, and Semicon 2.0, approved in July 2026, increased that commitment to ₹1,27,500 crore. As the Economic Times noted, the expanded plan covers six pillars: chip design, equipment and materials, fabrication, advanced packaging, research and development, and talent development.
Progress is no longer theoretical. According to the reports, 12 projects across six states have been approved, with committed investment exceeding ₹1.64 lakh crore. Three facilities, including those linked to Micron, Kaynes and CG Semi, are already in commercial production, while officials say five semiconductor units are now operational.
Talent is becoming a central part of the strategy. The Chips to Start-Up programme aims to create 85,000 industry-ready professionals, and more than 68,000 students have already been trained on electronic design automation tools. By April 2026, 211 chips had been taped out by 75 institutions, with seven fabricated at nodes including 12 nanometres, showing that domestic design work is beginning to reach real production stages.
The ecosystem is also being built around shared infrastructure. The ChipIN Centre at C-DAC in Bengaluru has given researchers and institutions access to design tools and fabrication support, with around 1 lakh users from 400 organisations and 175 lakh hours of tool usage recorded. Officials say six shared wafer runs led to 122 chip submissions, while 56 student-designed chips were fabricated and delivered.
SEMICON India 2026 is being used to showcase that wider value chain, with more than 600 companies participating alongside global investors, researchers, policymakers and students. Country pavilions from Japan, South Korea, Malaysia, the Netherlands, Singapore and Sweden underline the international interest in India’s chip ambitions, while the agenda extends from supply chains and chemicals to sustainability and workforce development.
India’s semiconductor policy is also being linked to its artificial intelligence ambitions. The IndiaAI Mission, with an outlay of ₹10,372 crore, has expanded shared computing capacity to more than 45,000 GPUs. By August 2026, 237 projects had used subsidised computing, accounting for 93.18 lakh GPU hours, reinforcing the government’s view that chips are core infrastructure for the next generation of computing.
Foreign Secretary Vikram Misri has also framed the strategy as a balance between self-reliance and partnership. According to The Economic Times, he said India must build sovereign strengths in design, packaging and manufacturing while working with global equipment makers, material suppliers and design companies. That approach points to the central challenge ahead: not merely making chips in India, but embedding the country in the global semiconductor chain as a durable participant.
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