India is aiming to reach a significant technological and manufacturing milestone, with 50 per cent self-reliance in semiconductor demand by the fiscal year 2035, according to the estimates by the Ministry of Electronics and Information Technology (MeitY).
Over the next 10 years, it is expected that domestic manufacturing capacity would substantially increase, shows MeitY estimates.
The estimates highlighted that India is working to reduce its excessive reliance on imports, with multiple semiconductor production and assembly facilities already under construction.
According to officials, some of these manufacturing facilities may start producing semiconductors commercially as early as this year, signalling the beginning of India’s transformation into a semiconductor-producing country.
Policymakers are becoming more worried about India’s increasing reliance on imports of semiconductors. The country’s import bill for semiconductors has increased significantly in recent years, surpassing USD 30.3 billion in FY25. Compared to USD 19.3 billion in FY23 and USD 11.9 billion in FY19, this is a major increase.
India must strengthen its local capabilities as the country’s foreign exchange reserves are severely strained by these increasing imports. The government hopes to reduce this financial burden and increase economic stability by boosting domestic manufacturing.
The growth of India’s chip manufacturing ecosystem has been substantially supported by India Semiconductor Mission. 12 projects under this plan have already been approved by the government, and at least four are expected to start functioning commercially this year.
The objective of these projects is to build a strong manufacturing base that spans several semiconductor value chain domains. With an estimated expenditure of Rs 1 lakh crore, the government is also preparing an improved version of the programme called India Semiconductor Mission 2.0.
With this, building a complete ecosystem, including the manufacturing of necessary elements like chemicals, gasses, and sophisticated technology, will be the main goal of this extended effort.
Furthermore, India’s semiconductor consumption is estimated by NITI Aayog to reach USD 206 billion by 2035, a five-fold rise from the predicted USD 44 billion in FY26. This rapid expansion highlights how crucial it is to increase local manufacturing capacity in order to meet future demands.
