By 2035, India should target building a USD 120-150 billion semiconductor value chain by choosing leadership and purpose over participation. Instead of chasing the global wafer race from behind, India should define its own pathway—one that is not only distinct but shaped by strategic self-sufficiency, ecosystem strength and global indispensability, the roadmap titled “Future of India’s Semiconductor Industry” says.

The roadmap released on May 29, 2026, has come in the context of the Government of India’s decisive steps taken through the India Semiconductor Mission (ISM) that aims to nurture domestic capabilities across design, manufacturing and ecosystem development. ISM 1.0 was officially announced and approved by Union Cabinet in December 2021 with a total outlay of Rs76,000 crore. Projects started beginning to take shape by 2022 and 2023 and over 10 projects were approved under the first phase. Union Budget 2026-27 announced ISM2.0 as next phase with budgetary allocation of only Rs1,000 crore. Though the mission aimed to enable India to design and manufacture chips for 70-75 per cent of domestic applications by 2029, India’s first fabrication plant under ISM is expected to commence production by 2028.

Although the vision document says that the initial progress is encouraging, India’s semiconductor manufacturing is at a nascent stage, resulting in a heavy reliance on imports to meet domestic demand. For India, it presents an urgency, due to four reasons – significant import dependence, national security risk, drain on forex, and societal upliftment.

NITY Aayog’s roadmap has therefore acquired a great importance, which will need to be followed in right earnest by the government of India, if the country wants to succeed at all in its semiconductor Mission. It is also important because semiconductors sit at the core of modern economic power. They serve as the critical backbone powering artificial intelligence, telecommunications, electric mobility, defence systems, healthcare technologies and digital public infrastructure. Given their pivotal role in technology-driven advancements, semiconductors are not just strategic assets but central to economic resilience and national security. They are imperative to India’s aspiration to become a developed nation by 2047.

With intensifying geopolitical pressures and technology competition leading to the fragmentation of global supply chains, building domestic capabilities to design, manufacture and integrate semiconductors will decisively shape India’s future growth and strategic autonomy, the roadmap says.

By 2035, the global semiconductor market is expected to exceed USD 1.5 trillion. India’s semiconductor demand is growing even faster, underpinned by strong domestic consumption across electronics, automotive, telecom, energy and defence. The country’s semiconductor market is projected to reach around USD 200 billion by 2035. However, despite the growing domestic demand, nearly 90–95 per cent of this demand is currently met through imports, leading to large foreign exchange outflows and increasing the vulnerability of critical sectors to supply-chain disruptions. This widening gap between demand growth and limited domestic capability represents a critical strategic vulnerability.

At the core of the Aayog’s vision document is a resilient and disciplined manufacturing foundation, anchored by world-class fabs that focus on what matters most to India’s economy and strategic autonomy: mature-node logic, specialty analog and mixed-signal chips and compound semiconductors such as Silicon Carbide (SiC) and Gallium Nitride (GaN).Together, they will power India’s automotive, energy, industrial, telecom and strategic sectors—ensuring that technologies critical to India’s future are built on Indian soil. When it comes to advanced-node capability, the strategy most suitable for India is a selective and pragmatic approach aligned with national interest.

Realising this ambition, the vision says, requires deliberate choices about where India competes and how it allocates capital, talent and policy attention. While leadership in advanced-node wafer manufacturing remains a long-term aspiration, establishing strong dominance in mature and compound nodes should be a near-term priority. In addition, India should aim to secure self-reliance for domestic demand while aggressively targeting a top-three global position in advanced packaging. Simultaneously, India should strive to integrate itself into the core of global semiconductor supply chains by emerging as a critical global supplier of wide-band gap materials such as SiC and GaN. Overall, India’s strategy is anchored in five mutually reinforcing pillars.

However, in a separate chapter, the vision document says that building the ecosystem will not be an easy task. “While the urgency to build the domestic semiconductor ecosystem is apparent, achieving it is far from easy. The evolution of the semiconductor ecosystem faces six challenges, which act as significant entry barriers. The six challenges are – technological complexities, scarcity of talents, high resources, acceptance of Made in India chips, need more time on account of long gestation period, and high capital requirement.

The roadmap proposed structured actionable programmes across short (0-2) year, medium (3-5 years) and long term (6-10 years) which phases and sequenced approach, that it hopes may help build robust indigenous ecosystem. Building a globally competitive semiconductor ecosystem in India will require nearly USD 135–180 billion in cumulative semiconductor investments over the next decade, directed toward growth capital across design, fabrication, advanced packaging, materials and supporting infrastructure. It says that Government of India should commit at least one-third of the required investment to de-risk projects and anchor long-term investor confidence. This, in turn, can crowd in private capital at scale. (IPA Service)