India Strengthens Semiconductor Mission for Global Manufacturing Leadership

Union Cabinet Reinforces India Semiconductor Mission for Global Manufacturing Leadership

The Union Cabinet of India continues its steady support for the India Semiconductor Mission (ISM), positioning the country to become a global leader in electronics manufacturing. Launched in December 2021 with a substantial ₹76,000 crore budget, the Mission’s far-reaching strategy aims to strengthen the nation’s semiconductor and display manufacturing ecosystem, minimize reliance on imports, and boost integration with global value chains. The renewed government drive, as evidenced through ongoing policy initiatives and public announcements in 2025, underscores the central role semiconductors play in India’s economic and technological ambitions.[2]

Background: Genesis and Aims of the India Semiconductor Mission

The India Semiconductor Mission was constituted to catalyze the development of a robust semiconductor and display manufacturing ecosystem in the country. It operates under the administrative guidance of the Ministry of Electronics and Information Technology (MeitY). ISM is designed as the nodal agency for administering the government’s ambitious schemes in this domain. Its objectives span financial assistance, industry-academia collaboration, research facilitation, and the promotion of design, manufacturing, and packaging capabilities.[1] By implementing these objectives, the Mission seeks to elevate India’s global standing in the critical semiconductor domain and position the country as a hub of electronics innovation.

The policy impetus stems from the accelerating global demand for chips, which are foundational to the production of consumer electronics, automotive components, industrial machinery, and next-generation telecommunications infrastructure. Given supply chain vulnerabilities highlighted by recent international disruptions, the Indian government views a self-reliant semiconductor sector as critical for securing its digital economy and strategic interests.

Strategic Pillars: Key Schemes and Their Objectives

The Mission encompasses several dedicated schemes, each tailored to different segments of the value chain:

• Semiconductor Fabs Scheme: Focused on creating manufacturing units for wafer fabrication plants, this scheme provides incentives for companies establishing advanced foundry facilities in India.
• Display Fabs Scheme: Designed to encourage investments in state-of-the-art display manufacturing, including both organic light-emitting diode (OLED) and liquid crystal display (LCD) panels.
• Compound Semiconductors and ATMP/OSAT Scheme: Targets the development of fabs for compound semiconductor chips and Assembly, Testing, Marking, and Packaging (ATMP) or Outsourced Semiconductor Assembly and Test (OSAT) facilities.
• Design Linked Incentive (DLI) Scheme: Promotes the indigenous design of semiconductors by extending fiscal support to startups and MSMEs involved in chip design and system innovation.

These schemes collectively serve to strengthen each layer of the electronics value chain, reduce import dependency, and promote domestic and export-oriented manufacturing.[1]

Recent Developments: Investments, Capacity Expansion, and Startup Support

In the first half of 2025, momentum in India’s semiconductor ecosystem has been marked by a series of new project launches and investment commitments. Notably, May 2025 saw the inauguration of two advanced semiconductor design centres in Noida and Bengaluru. These centres, equipped with 3-nanometer technology, signify India’s growing capability in designing state-of-the-art chips for multiple applications.[2]

The government has reported key milestones:

• Kaynes Semicon Pvt Ltd: Commissioned with an investment of ₹3,307 crore, this facility is capable of producing 6.33 million chips daily, addressing demand across consumer electronics and industrial applications.[1]
• HCL-Foxconn Joint Venture, Jewar (Uttar Pradesh): Announced in May 2025, this project commands a proposed capital outlay of ₹3,700 crore and is anticipated to manufacture 20,000 wafers per month, amounting to an annual production of approximately 36 million units.[1]

Beyond large-scale industrial projects, the Design Linked Incentive (DLI) Scheme has already committed ₹234 crore in support of Indian semiconductor startups since its launch in 2022. This measure is designed to mobilize innovation and entrepreneurship at the grassroots level, enabling homegrown enterprises to contribute competitively within the global chip design ecosystem.

Skill Development and Capacity Building Initiatives

Recognizing the acute need for a skilled workforce, ISM has introduced multiple avenues for technical upskilling and training. Programs include hands-on workshops, certification courses, and mentorship platforms tailored for students and early-career professionals seeking expertise in semiconductor design, fabrication, and packaging.[1]

ISM works in partnership with leading Indian research institutes and universities to facilitate:

• Cutting-edge research and technology development projects
• Joint industry-academia initiatives, fostering knowledge transfer
• Talent pipeline strengthening, including incentives for curriculum modernization and advanced laboratory infrastructure

These collaboration models aim to nurture highly skilled engineers, researchers, and technocrats capable of addressing both current and future technology challenges for the industry.

Recognition and Statements from the Union Government

"India is now taking a leading position in the semiconductor sector on the global stage. The government’s focus is on establishing a resilient manufacturing ecosystem that supports both our domestic needs and the world’s requirements."

Government officials, including the Minister for Electronics and Information Technology, have repeatedly emphasized that India’s semiconductor advancement will be a cornerstone for economic growth, digitalization, and the nation’s emergence as a trusted partner in global supply chains.[3]

Administrative Mechanism and Leadership Structure

The ISM is guided by a select group of domain experts who bring extensive international expertise in semiconductor and display manufacturing. The Mission’s administrative structure ensures the efficient implementation and oversight of financial incentives, seamless coordination between states and central ministries, and active engagement with industry stakeholders.[2]

Implementation processes are streamlined to offer single-window clearance systems, policy certainty for investors, and technical advisory support for project proponents. This approach enhances ease of doing business within the sector and reduces entry barriers for new technology ventures.

Integration with Global Electronics Value Chains

A primary mission of the ISM is to integrate India’s vast talent pool, technology assets, and manufacturing capacities into the global electronics value chain. The Mission provides a platform for multinational corporations, Indian conglomerates, and innovative startups to collaborate and establish joint research, production, and marketing initiatives.

In support of this vision, India co-hosts major international events, such as the SEMICON India summit, which convenes global industry leaders, engineers, investors, and policy experts to catalyze partnerships and knowledge exchange. These events serve as showcases for India’s technological advancements and attract investments for next-generation electronics projects.[1]

Industrial and Public Sector Impact

The semiconductor ecosystem expansion is set to have multifaceted impacts on India’s economy and public services:

• Industrial Growth: Increased domestic manufacturing capacity will reduce dependency on imported chips, enhance the competitiveness of local electronics firms, and foster ancillary industries, such as automated equipment manufacturing and chemicals.
• Job Creation: New manufacturing plants, design labs, and allied research centres are expected to generate high-value employment across technical, managerial, and operational profiles.
• Research and Innovation: State-supported R&D will bolster India’s capabilities in frontier domains like artificial intelligence, 5G communications, and automotive electronics.
• Public Infrastructure: Reliable semiconductor supply underpins critical sectors including healthcare, transportation, digital government services, security systems, and energy management.

These outcomes are anticipated to accelerate the growth of India’s electronics market, which is projected to reach $63 billion by 2026, according to government estimates.[1]

Ongoing and Planned Initiatives

The India Semiconductor Mission remains dynamic in its outlook, with plans for further expansion. Key upcoming milestones include:

• Launch of new fabrication facilities (fabs) and packaging units aligned with the latest technology generations.
• Expanded support for design startups through both funding and incubation partnerships.
• International knowledge exchange forums, including joint ventures with leading global universities and R&D organizations.
• Additional skill development initiatives targeting at least 100,000 engineers and technicians over the next five years.
• Strengthening supply chain resilience programs to ensure a secure and reliable flow of materials, inputs, and finished components.

Industry observers highlight that the success of the Mission will depend on the sustained facilitation of research, timely provision of fiscal support, and the ability to attract both domestic and foreign investments in a rapidly evolving sector.

India’s Position in the Evolving Global Semiconductor Space

While the global semiconductor market is characterized by established players from East Asia, North America, and Europe, India’s focus under ISM is to carve a unique position. The country’s large engineering workforce, competitive cost structure, and proactive policy environment serve as distinct advantages. Furthermore, India’s emphasis on robust talent training, research incubation, and government-brokered industry partnerships signals a new direction in global electronics supply chains.[2]

Conclusion: The Road Ahead

The Union Cabinet’s sustained backing of the India Semiconductor Mission reflects a comprehensive and future-oriented approach to industrial development. With its emphasis on manufacturing, design, human resource development, and global integration, the Mission stands as a cornerstone of India’s ambition to become a dominant force in the world’s electronics value chain. Ongoing government commitment, industry participation, and strategic partnerships will be pivotal in securing not only technological self-reliance but also national economic security in the years ahead.