Semiconductor – India Unveils Long-Term Plan to Build Global Chip Industry Presence
Semiconductor – India has outlined an ambitious vision to become a major force in the global semiconductor sector by 2035, with a target of creating a semiconductor value chain worth between USD 120 billion and USD 150 billion. The strategy, prepared by NITI Aayog’s Frontier Tech Hub and released in May 2026, presents a decade-long roadmap designed to strengthen domestic capabilities, reduce dependence on imports, and establish the country as a key contributor to the international chip industry.
Strategic Shift Towards Advanced Capabilities
The report, titled “Future of India’s Semiconductor Industry,” arrives shortly after the announcement of the India Semiconductor Mission (ISM) 2.0 in the Union Budget 2026. According to the document, the next phase of development will focus on expanding and deepening the semiconductor ecosystem rather than simply creating foundational infrastructure. The objective is to move India from its current position as a major consumer of chips to a more influential role within global supply networks.
Focus on Niche Segments Instead of Direct Competition
Rather than competing directly with established manufacturing hubs in producing the most advanced semiconductor nodes, the roadmap recommends a specialized approach. It highlights opportunities in areas where India already possesses strengths, particularly semiconductor design and emerging technology applications. This “More-than-Moore” strategy aims to capitalize on high-growth market segments while avoiding costly competition in areas dominated by established players.
The report estimates that India could account for 10% to 13% of the global semiconductor market by 2035. It also forecasts a domestic semiconductor market approaching USD 200 billion. In addition, policymakers aim to achieve 35% to 50% self-reliance in semiconductor demand while retaining a majority of value creation within the country through local design, packaging, and material development.
Building Leadership in Packaging and Chip Design
A key component of the strategy is to position India among the world’s top three destinations for outsourced semiconductor assembly and testing, commonly known as OSAT. The roadmap also emphasizes advanced packaging technologies and seeks to strengthen India’s role in designing chips used for artificial intelligence, quantum computing, and high-performance computing applications.
The plan envisions the development of more than 100 advanced intellectual properties, helping domestic companies move higher up the technology value chain.
Technology Sovereignty at the Core
Speaking on the importance of the initiative, NITI Aayog Vice Chairman Ashok Kumar Lahiri noted that excessive reliance on imported technologies creates long-term strategic challenges. He stressed that achieving technological independence is essential for India’s broader development goals and future economic resilience.
To address industry challenges, the roadmap is structured around five major pillars: Pioneering, Policy and Investment, Production, People, and Partnership. These pillars are intended to tackle issues such as high capital requirements, limited skilled manpower, and the extended timelines involved in semiconductor manufacturing projects.
Investment and Manufacturing Priorities
The report estimates that total investments of USD 135 billion to USD 180 billion will be needed over the next ten years. It recommends 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 and institutional investors.
On manufacturing, the strategy favors targeted expansion rather than attempting to replicate the entire global supply chain. India is expected to concentrate on mature logic nodes ranging from 28 nm to 65 nm, as well as specialty chips used in automotive systems, Internet of Things devices, and power management solutions.
The report also identifies strong potential in advanced materials such as Silicon Carbide and Gallium Nitride. Given the energy-intensive nature of chip fabrication, it proposes examining Small Modular Reactors as a possible source of dedicated power for semiconductor manufacturing clusters.
Talent Development and Global Partnerships
A significant emphasis has been placed on workforce development. The roadmap proposes a National Semiconductor Talent Pyramid and recommends creating a National Fab Academy to train technicians and engineers for semiconductor manufacturing environments. Educational programs would also be updated to strengthen practical industry skills.
International cooperation forms another major pillar of the strategy. India plans to deepen collaboration with trusted partners including the United States, the European Union, Japan, and South Korea. These partnerships are expected to improve supply chain resilience and reduce risks arising from geopolitical tensions and export restrictions.
Currently, India imports nearly 90% to 95% of its semiconductor requirements. Officials believe the changing global supply chain landscape and the growing China-plus-one strategy present a valuable opportunity for the country. NITI Aayog CEO Nidhi Chhibber said that delaying action could have consequences extending beyond economics, affecting national security and digital independence in the years ahead