India’s Semiconductor Industry: Growth, Innovation & Investment
India’s semiconductor industry has recently gained unprecedented momentum. The central government has not only developed aggressive strategies to boost chip demand but is also introducing ambitious initiatives that could enhance India’s stature in domestic production, local sourcing, and global competitiveness. Announcements made recently by the Ministry of Electronics and IT have the potential to be a game-changer for the country’s youth and the technology sector.
Expansion of the Semiconductor Mission—Towards Self-Reliance
Prime Minister Narendra Modi, at the “Semicon India 2025” platform, made it clear that India’s semiconductor journey is now accelerating. Indeed, following lockdowns and global disruptions, the demand for semiconductors has risen worldwide, while India has transitioned from being merely a consumer to a producer. Through initiatives such as the Design-Linked Incentive (DLI) scheme, Production-Linked Incentive (PLI) program, and the Semiconductor Mission, the country is not only charting a path towards self-reliance but is also establishing a distinct presence in the global market.
Key Features of the Design-Linked Incentive (DLI) Scheme
Launched in 2021, the DLI scheme has so far approved 23 chip design projects, with notable participation from startups and MSMEs. These companies are receiving financial support for design, development, and prototyping, along with access to state-of-the-art tools. The projects cover areas such as surveillance cameras, energy meters, microprocessors, smart networking, and specialized chip designs for electric vehicles. This initiative is providing new direction to India’s manufacturing and innovation ecosystem.
Focus on 25 Categories of Electronic Products
Under the government’s new strategy, the use of domestically made chips will be made mandatory or highly prioritized across 25 major electronic products, including TVs, ACs, refrigerators, energy meters, telecom equipment, and IoT devices. Strict local sourcing rules are being planned for companies, ensuring direct demand for Made-in-India chips and fostering industry expansion. This will help companies scale chipset production industrially, potentially increasing India’s value addition from around 15% to 35%.
Emphasis on Security and Certification
Quality and security have become top priorities in chip manufacturing. The government may soon mandate stringent certification and local testing. For instance, last year, local quality testing and certification were implemented for CCTV cameras, and a similar system could now be extended to TVs, ACs, energy meters, telecom equipment, and IoT devices. This step is aimed at strengthening both national security and global quality standards.
Investment and Foreign Participation
Foreign investors are increasingly showing interest in the semiconductor sector. Investments have been made by semiconductor companies in states like Gujarat, Uttar Pradesh, and Odisha, and India has now moved beyond end-to-end manufacturing (OSAT pilot projects). The government aims to transform the country into a global hub for everything from design and packaging to finished chips. The NITI Aayog predicts that technological innovations like 2D materials could position India as a leader in the international semiconductor race.
New Opportunities for Youth and Startups
The current policy is proving beneficial not only for industry growth but also for youth and startups. In the coming years, there will be demand for around 500,000 semiconductor professionals. To address this, the central government plans to launch specialized training and skill development programs related to semiconductors, potentially revolutionizing the technical education sector.
A New Flight for Technology, Entrepreneurship, and Make in India
The government’s policy is clear—boost domestic demand and manufacturing of semiconductor chips to strengthen value addition and make India a true global “chip maker.” Prime Minister Modi stated, “The day is not far when India’s smallest chip will bring the biggest change in the world.” The vision of Digital India, self-reliant India, and Make in India is now advancing along the path of a technology revolution, with this new chip policy laying the foundation.
Conclusion
The central government’s new semiconductor policy is expected to not only boost domestic demand but also open new avenues in engineering, technology, manufacturing, and employment. India’s emerging role in the global supply chain and its journey through the fourth industrial revolution could make this policy a milestone for the country in the years to come.
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