India has approved 10 semiconductor projects across six states, with a total investment of $18.2 billion, as part of a strategic push to establish a homegrown chip industry. The aim is to reduce reliance on imports, secure supply for critical sectors, and capture more value in the electronics supply chain, particularly as global manufacturers diversify away from China.
These projects span fabrication plants, testing facilities, and packaging units. A highlight is Tata Electronics’ $11 billion fab in Gujarat, developed in partnership with Taiwan’s Powerchip.
To encourage investment, the government will cover 50% of project costs for all fabrication, testing, and packaging units, regardless of chip node size.
Challenges remain. Analysts note that India’s investment and talent pool, while growing, may still fall short of competing with established leaders in Taiwan, South Korea, and the U.S. Key areas for improvement include infrastructure, logistics, regulatory support, and skilled workforce development.
Over the next few years, India must operationalize these fabs, develop a supporting electronics ecosystem, ensure reliable infrastructure, and expand its talent pool. Success could establish India as a major chip manufacturing hub, while failure risks leaving these projects as high-profile announcements without long-term industrial impact.
