Highlights
- The proposed fund will offer subsidies for chip design projects, manufacturing equipment and semiconductor supply chain development
- The move aligns closely with the Centre’s broader ambition to position India as a global semiconductor manufacturing hub
- As per industry estimates, the Indian semiconductor market is projected to reach a size of $100 Bn–$110 Bn by 2030
India is gearing up for a major transformation in its technology and manufacturing landscape, as the government is reportedly planning to launch a massive ₹1 lakh crore (approximately $10.8 billion) semiconductor fund. This ambitious move could mark a turning point in the country’s efforts to become a global hub for chip production.
According to reports, the proposed fund is currently under discussion and is expected to provide financial support across key segments of the semiconductor ecosystem. This includes subsidies for chip design projects, manufacturing equipment, and the development of a robust semiconductor supply chain. The goal is clear: reduce dependence on imports and build a self-reliant semiconductor industry within India.
The timing of this initiative is crucial. Over the past few years, global demand for semiconductors has surged significantly, driven by the rapid growth of smartphones, electric vehicles, artificial intelligence, and digital infrastructure. Chips have become the backbone of modern technology, and countries around the world are racing to secure their supply chains. India, too, is stepping up its efforts to stay competitive in this high-stakes sector.
Industry estimates suggest that the Indian semiconductor market could reach a valuation of $100 billion to $110 billion by 2030. This projected growth highlights the urgent need for strong domestic manufacturing capabilities. By investing heavily in infrastructure and innovation today, India aims to capture a significant share of this expanding market.
The government has set an ambitious target of meeting nearly 70–75% of the country’s semiconductor demand through domestic production by 2029. Achieving this milestone would significantly reduce reliance on foreign suppliers and strengthen India’s position in the global technology value chain.
This is not the first step India has taken in this direction. Back in December 2021, the government launched the India Semiconductor Mission (ISM) with a financial outlay of ₹76,000 crore. The initiative was designed to provide incentives and financial assistance for semiconductor fabrication plants, display manufacturing units, and chip design companies operating in the country.
To further accelerate progress, an additional allocation of ₹8,000 crore has been earmarked for the 2026–27 period under a modified program aimed at developing the semiconductor and display manufacturing ecosystem. This program focuses on boosting capital investment, generating high-quality employment opportunities, and expanding domestic capabilities in fabrication, packaging, and chip design.
Looking ahead, the next phase of India’s semiconductor push—often referred to as “Semicon 2.0”—is expected to focus on advanced manufacturing technologies. The roadmap includes the development of cutting-edge 3-nanometer and 2-nanometer chip technologies, which are currently at the forefront of global semiconductor innovation. Successfully achieving this would place India among a select group of nations with advanced chip-making capabilities.
While the finance minister has confirmed that the next phase of the semiconductor program will be launched soon, specific details regarding the total investment size are yet to be disclosed. However, reports suggest that the government may consider allocating as much as $20 billion (around ₹1.7 lakh crore) for the next phase.
At the same time, investor interest in India’s semiconductor ecosystem is gradually picking up. According to recent industry reports, Indian semiconductor startups raised around $50 million in 2025, a significant increase from over $28 million in 2024. This growth indicates rising confidence among investors in the long-term potential of the sector.
Several startups have already secured funding this year, including emerging players working on chip design and semiconductor technologies. This trend reflects the growing momentum within India’s startup ecosystem, particularly in deep-tech and hardware innovation.
Beyond startups, global semiconductor giants are also expanding their presence in India. Micron Technology, one of the leading players in the industry, recently inaugurated its semiconductor assembly and testing facility in Sanand, Gujarat. The facility has already begun commercial production and is expected to scale significantly in the coming years. By 2026, it is projected to assemble and test tens of millions of chips annually.
Meanwhile, Tata Electronics is making significant progress on its semiconductor fabrication plant in Dholera, Gujarat. This upcoming facility is expected to play a crucial role in supporting India’s semiconductor ambitions. In addition to large-scale manufacturing, it is also likely to help startups and researchers develop prototype chips, thereby strengthening the innovation ecosystem.
These developments clearly indicate that India is not just focusing on policy announcements but is actively building the infrastructure needed to support long-term growth in the semiconductor sector. The combination of government funding, private investment, and global partnerships is creating a strong foundation for the industry.
Overall, the proposed ₹1 lakh crore semiconductor fund could serve as a catalyst for rapid growth and transformation. It aligns with India’s broader vision of becoming a global manufacturing powerhouse and a key player in the digital economy.
As the world becomes increasingly dependent on advanced technologies, the importance of semiconductors will only continue to grow. By taking bold steps today, India is positioning itself to capitalize on future opportunities and reduce vulnerabilities in critical supply chains.
If these plans are executed effectively, the coming decade could witness the rise of India as a major force in the global semiconductor industry. What we are seeing now may very well be the beginning of a “chip revolution” in the country—one that could reshape its economic and technological future.
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