India designs nearly a fifth of the world’s chips but manufactures almost none. A contradiction that NITI Aayog’s new semiconductor roadmap sets out to resolve, redefining the race to make India indispensable by 2035 and a Viksit Bharat by 2047. The roadmap, titled “Frontier Tech Hub: Future of India’s Semiconductor Industry,” notes that between FY17 and FY25, India cumulatively spent almost USD 150 billion importing semiconductor products, with imports growing at a compound annual rate of 23 per cent. If that pace holds, the annual import bill alone could swell to USD 240 billion by 2035. Today, an estimated 90-95 per cent of India’s semiconductor demand is met through imports. The answer to this issue is not to play catch-up in a race others have dominated for decades, but to redefine the contest entirely. Building a USD 120-150 billion domestic semiconductor value chain by 2035.
Semiconductors are now used in everything from artificial intelligence, defence systems and telecom, to electric mobility, energy grids and digital public infrastructure. For a country aspiring to developed-nation status by 2047, the roadmap of NITI Aayog suggests technological sovereignty must begin at the silicon layer, and a growing dependence on imported “black-box technologies” is among the biggest risks to that aspiration.
The cost of 70 years dependence
The case for urgency rests on four pillars, the report lays out plainly. The first is the sheer scale of import dependence. Global chip supply is concentrated in a handful of geographies, so any disruption like a natural disaster in Taiwan, a geopolitical flare-up, or another pandemic-style shock can paralyse Indian industries from automobiles to healthcare, as the Covid-19 chip shortage already demonstrated.
The second, and most sensitive for India’s strategic community, is national security. Many semiconductors used in defence systems are produced abroad, and India’s aerospace and defence platforms, such as unmanned aerial vehicles and naval and airborne systems, are currently dependent on imported chips. As India modernises its military, the roadmap warns, a reliable domestic source becomes essential to safeguarding the autonomy of its defence programmes. Relying on foreign silicon for the brains of one’s weapons systems is a vulnerability no rising power can accept.
The third is the forex drain already described, and the fourth is societal, where affordable, India-made chips for 5G/6G handsets could decisively expand rural connectivity, telemedicine and precision agriculture. Together, these four imperatives frame semiconductors as central not just to economic resilience but to inclusive nation-building.
A strategy of selective depth
The Indian government acknowledges, through this roadmap, that it cannot replicate the full global manufacturing spectrum, nor should it try. Instead, the strategy is anchored in “selective depth, capital efficiency and system-level differentiation”, going deep in a few areas where India can lead, rather than spreading thin across a field already crowded with entrenched incumbents.
The targets are specific. India should aim to capture 10-13% of the global chip market and build the foundation for a USD 120-150 billion domestic industry by 2035. It should pursue chip self-sufficiency of 15-25 per cent of local demand by 2030, rising to 35-50 per cent by 2035, while ensuring that 55-70 per cent of the value in every chip consumed in India flows through Indian hands by 2035, whether through design, packaging or materials. It should become a top-three global destination for outsourced semiconductor assembly and test (OSAT) and advanced packaging, and the top supplier of wide-bandgap materials such as silicon carbide (SiC) and gallium nitride (GaN) that power EVs, renewable energy and telecom.
The logic is to win what the report calls the “More-than-Moore” era. As the industry shifts away from relentless transistor-shrinking toward advanced packaging, chiplets, 2.5D/3D integration and system-level design, value is migrating to precisely the segments where entry barriers are lower and India’s structural strengths, design talent, software depth, and materials potential count most. On manufacturing, the roadmap recommends a disciplined path. The demand-aligned fab strategy has two to three mature logic nodes (28-65 nm) for automotive and industrial use, speciality analogue fabs, two compound-semiconductor fabs for SiC and GaN, and only one selective advanced node (14-7 nm) to anchor strategic national requirements rather than chase volume parity. India’s first fabrication facility, at Dholera in Gujarat, is expected to begin production by 2028.
Underpinning all of this is the Union Budget 2026 announcement of ISM 2.0 a shift in the government’s framing from “ecosystem initiation to ecosystem deepening.” The mission now sharpens its focus on advanced packaging, compound semiconductors, critical design infrastructure and long-term capital mobilisation, which can be organised around five strategic pillars: Pioneering, Policy and Investment, Production, People and Partnership. The price of admission is steep. The roadmap estimates India needs USD 135-180 billion in growth capital over the next decade, with the government urged to commit at least a third to de-risk projects and crowd in private money.
How India’s path differs from the world’s path
India is not entering an empty field. A fierce global race is already reshaping industrial policy, and a brief comparison reveals just how deliberately India’s approach diverges from the cash-heavy strategies of its rivals.
The United States, through its CHIPS Act, has committed USD 52.7 billion, USD 39 billion in manufacturing incentives, USD 13.2 billion for R&D and workforce, plus a 25 per cent investment tax credit and up to USD 75 billion in lending authority. The European Union’s Chips Act mobilises at least EUR 43 billion (around USD 50 billion) in public funding, aiming to double Europe’s share of global production. Japan has earmarked roughly USD 28 billion and about 0.7 per cent of GDP for backing ventures such as the TSMC-Sony-Denso plant in Kumamoto and the government-backed Rapidus, which aims to mass-produce 2 nm chips by 2027. South Korea unveiled a KRW 33 trillion (USD 23.25 billion) package in 2025, layered atop its “K-Chips Act” tax credits.
Towering over them all is China, whose state-guided “Big Fund” runs to over USD 100 billion across three phases, with total government support over the past decade estimated at around USD 324 billion, a “state-commanded but market-driven” model channelling capital into front-end manufacturing and R&D, with self-sufficiency goals of 70 per cent by 2025.
Set against these figures, India’s strategy is conspicuously different in kind. Where the US, EU and China pour vast sums into leading-edge wafer fabrication, India deliberately declines to fight that capital-intensive battle from behind. A single advanced-node 3 nm fab can cost over USD 15 billion, and fabs typically take four to five years just to begin production. Rather than match that spend dollar-for-dollar, India’s roadmap picks chokepoints in the existing supply chain through advanced packaging, compound semiconductors, and wide-bandgap materials. Where leadership is still up for grabs and where India can set standards, shape supply chains, and create enduring global dependence. It is a strategy of leverage over brute force to become the irreplaceable node others must route through, instead of an expensive also-ran in everyone else’s race.
The hard road ahead
The roadmap is candid that none of this will be easy. It identifies six entry barriers: technology, talent, resources, acceptance, time and capital. India lags in hardware R&D infrastructure despite its software strength, faces shortages of specialised fab technicians and materials scientists, and must overcome the entrenched trust that East Asian suppliers have built with global manufacturers over decades. Made-in-India chips will need to meet rigorous global benchmarks, which takes time and sustained effort. Manufacturing is also punishingly resource-hungry; the global industry consumes around 0.3 per cent of the world’s electricity. The roadmap even floats small modular nuclear reactors to meet fab power demands.
To navigate these, the report leans on India’s genuine advantages, chiefly its design workforce, which already constitutes about 20 per cent of the global total. The ambition is to convert this from a services-led base into a creator of differentiated intellectual property, targeting more than 100 advanced chip IPs by 2035 across AI, quantum and high-performance computing, while building a four-tier “talent pyramid” from shop-floor technicians to system architects.
The thread running through every chapter is that the window will not stay open forever. Global supply-chain realignment, the China-plus-one shift and the fragmentation of centralised chip production have created an opening India may not see again. Whether India seizes it depends on three enablers: firstly, it’s a strategic clarity, second is disciplined execution, and third is sustained commitment over a decade or more.
India does not only want a seat at the semiconductor table, but it also wants to become a pillar that the global ecosystem cannot function without, where chips are designed, integrated, packaged, powered and made ready for the world. If that vision holds, semiconductors will turn from India’s sharpest strategic vulnerability into one of its most enduring sources of economic strength and technological sovereignty, a cornerstone, quite literally at the level of silicon, of the journey to Viksit Bharat 2047.
