India chip race advances its position in the semiconductor sector through government-backed initiatives and private investments, aiming to reduce import dependence and establish domestic manufacturing capabilities.
India has approved 10 semiconductor projects across six states as part of efforts to strengthen its role in the global chip race. These developments include assembly, testing, packaging units and one fabrication facility, backed by substantial investments and incentives under the India Semiconductor Mission.
The push comes as India’s chip imports continue to rise, reaching nearly $24 billion in 2024 with a 36 per cent increase. Domestic production targets growing demand, projected to double from $50 billion currently to $100 billion by 2030. Commercial semiconductor production is expected in the coming weeks.
India’s Semiconductor Ambitions Gain Momentum
The government launched the India Semiconductor Mission in 2021 with an outlay of ₹76,000 crore to attract investments in fabrication, display fabs, assembly, testing and packaging. To date, 10 projects have received approval, involving total investments exceeding ₹1.6 lakh crore.
Key among these is Tata Electronics’ semiconductor fab in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation in Dholera, Gujarat. The facility, with a projected cost of ₹91,526 crore, focuses on mature nodes from 28nm to 110nm. Construction progresses, with operations potentially starting by late 2026.
Tata Electronics also develops an assembly and testing facility in Assam, approved with investments of around $3.3 billion. On 8 December, Tata signed an agreement with Intel to explore manufacturing and packaging options in its upcoming facilities.
Micron Technology builds an assembly, testing and packaging plant in Sanand, Gujarat, with $2.75 billion investment. Approved in June 2023, the project faces delays, now targeting production in the latter half of the decade.
Kaynes Semicon operates a smaller unit in Gujarat. In October, it exported India’s first batch of sample chip modules to a client in California, marking an early milestone in the india chip race.
Other approved units include facilities in Odisha, Punjab, Andhra Pradesh and Uttar Pradesh, expanding the ecosystem beyond Gujarat and Assam.
Stephen Ezell, vice president at the Information Technology and Innovation Foundation, notes progress in recent years exceeds the previous decade. He attributes this to stronger political will and coordinated private sector commitments.
Global Chip Race India: Positioning as Alternative Hub
India seeks to emerge as a diversified manufacturing destination amid efforts by global companies to reduce reliance on China. The country already assembles advanced smartphones and holds about 20 per cent of the global chip design workforce.
Assembly, testing and packaging units provide a lower-risk entry point. These require investments typically between $50 million and $1 billion, with widely available technology.
Ashok Chandak, president of the India Electronics and Semiconductor Association, highlights that over half the global semiconductor market controls US-headquartered firms. Engagement through joint ventures or partnerships remains crucial.
China holds 30 per cent of the global assembly and packaging share. Taiwan leads in advanced fabrication, while the US dominates design. India’s projects focus initially on mature chips used in consumer electronics and automotive applications.
Domestic production aims to cut imports, which account for 3 per cent of India’s total import bill. Leading suppliers include China at 30 per cent, followed by Hong Kong, South Korea, Taiwan and Singapore.
Challenges Facing India Semiconductor Hub Goals
Several projects experience delays. Micron’s Gujarat facility, originally slated for late 2024, shifted to later timelines. Tata’s Assam unit, approved in February 2024, moved from mid-2025 to April 2026.
Experts stress the need for foreign partnerships to reach leading-edge nodes below 7nm. Domestic firms lack immediate competitiveness at such scales.
Incentives in India compare against higher support elsewhere. China offers substantial commitments and tax benefits, while the US provides $53 billion through its CHIPS Act.
Improvements in infrastructure, power reliability and regulatory processes remain essential to attract more investment.
Background: Evolution of Semiconductor Push
Earlier attempts at semiconductor manufacturing in India stalled. The current mission, approved in 2021, introduced fiscal support up to 50 per cent of project costs for approved units.
Subsequent approvals in 2025 added facilities in multiple states, broadening geographic spread. The programme now covers fabrication, compound semiconductors and assembly units.
What’s Next in India Chip Race
Commercial production from existing units approaches. Kaynes Semicon plans mass production ramp-up, while trial runs continue at other facilities.
The Gujarat fab represents a critical step if it commences operations in 2026. Additional incentives and partnerships could accelerate progress.
India’s efforts in the india chip race continue to evolve, balancing domestic needs with global competition. Sustained government support and private execution will determine long-term positioning as an india semiconductor hub in the expanding global chip race india faces.
Published in SouthAsianDesk, December 18th, 2025
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