India is ramping up efforts to become a major player in the global semiconductor industry as companies look to diversify production beyond China. Backed by a $10bn government incentive programme, the country has made notable progress—but experts say it still trails far behind industry leaders.
In October, Gujarat-based Kaynes Semicon exported its first batch of chip modules to the United States, marking a milestone for India’s chip ambitions. The shipment followed investments under Prime Minister Narendra Modi’s semiconductor push launched in 2021.
India’s most significant project is an $11bn semiconductor foundry under construction in Gujarat, led by Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation. The facility, expected to begin operations by late 2026, will produce mature chips between 28nm and 110nm, widely used in consumer electronics, automobiles and industrial equipment.
Alongside fabrication, India is focusing on assembly, testing and packaging (ATP), a lower-risk entry point. Major investments by Micron Technology and Tata Group aim to meet rising domestic demand, projected to double from $50bn to $100bn by 2030.
Despite this momentum, several projects have faced delays, and India’s incentives remain modest compared to China’s $48bn chip programme and the $53bn US CHIPS Act. Analysts say India will need sustained government support, improved infrastructure and strong foreign partnerships to compete at the cutting edge.
While India has a strong chip design talent base and is emerging as a “China Plus One” destination, experts warn that catching up with the US, Taiwan and China will be a long-term challenge requiring consistent policy execution and deeper global collaboration.
