India has approved semiconductor projects totaling about US$18.2 billion, aimed at establishing a full chipmaking ecosystem domestically. This move includes plans for multiple fabrication plants (“fabs”), testing facilities, and related infrastructure. A marquee project is an $11-billion fab in Gujarat involving Tata Electronics partnering with Taiwan’s Powerchip, tells CNBC.com.
The government is offering generous incentives: under its Semiconductor Mission, it will cover 50% of project costs for fabrication units, regardless of their process node. This signals a shift from earlier strategies that prioritized only the most advanced nodes, acknowledging India’s need to build capacity across a more practical spectrum.
Despite the scale and ambition, experts caution that money alone won’t suffice. Building fabs is capital intensive, but the semiconductor value chain involves many other moving parts: skilled workforce, supply chain components (chemicals, materials, precision tools), IP and R&D infrastructure, logistics, regulatory stability, and technology partnerships. India is strong in engineering talent, but many other pieces are nascent.
There’s also the global competitive context: Taiwan, South Korea, and the United States have long lead times, especially for advanced node fabrication (like sub-5 nm), and for ecosystem depth. India must catch up not just in building fabs but in making everything around them work smoothly.
India’s “chip powerhouse” plan is bold and possibly transformative. If it succeeds, it could reduce import dependence, power domestic tech growth, and create jobs. But it faces serious hurdles: technology maturity, supply chain robustness, and ecosystem development. Momentum is there; execution will decide whether it becomes a global contender or remains a hopeful aspiration.