In a major push toward technological sovereignty, India is aiming to meet 50% of its domestic semiconductor demand through local manufacturing by the fiscal year 2035. According to recent estimates from the Ministry of Electronics and Information Technology (MeitY), the country is embarking on a massive decade-long scaling operation to transform itself from a pure software powerhouse into a hardware manufacturing giant.
The aggressive timeline is fueled by a stark reality: India’s semiconductor import bill skyrockets. Imports prevail a staggering $30.3 billion in FY25, a sharp climb from $19.3 billion in FY23 and $11.9 billion in FY19. With NITI Aayog projecting domestic chip demand to experience a five-fold surge, jumping from $44 billion in FY26 to $206 billion by 2035, policymakers view localized fabrication as an economic and strategic imperative to protect foreign exchange reserves.
Operationalization Phase: Initiating Commercial Fabrication for this Year
India isn’t merely planning for the future; the groundwork is already in place. MeitY officials confirmed that out of 12 projects cleared under the India Semiconductor Mission (ISM) incentive scheme, at least four facilities are scheduled to begin commercial production before the end of this year.
Initial waves of domestic chips led by:
The Big Three: Combined facility plans from the Tata Group, CG Power, and Kaynes are projected to churn out a cumulative 69 million chips daily once commercial operations hit their stride.
Next-Gen Tech: The government has also greenlit an advanced project to introduce micro-LED technology to the country. The first micro-LED chips (ranging from 30 to 125 microns) are expected to roll off assembly lines within the next 22 months.
Upgrading the Blueprint: India Semiconductor Mission 2.0
The Ecosystem Strategy: Unlike early phases focused strictly on testing and packaging (OSAT) or specific fabs, ISM 2.0 will heavily target the deep-tech supply chain. Funding will be directed toward localizing critical raw materials, specialized chemicals, ultra-pure gases, and advanced manufacturing machinery.
The transition from isolated assembly plants to a self-sustaining tech ecosystem, the government is preparing to roll out ISM 2.0 with a massive proposed budget of Rs 100,000 crore (~$12 billion). By scaling up mature nodes, power electronics, specialty analog, and compound semiconductors, NITI Aayog envisions an indigenous semiconductor ecosystem valued at $120 billion by 2035. If successful, the initiative will drastically alter global supply chains, positioning India alongside the US, the EU, and China in the race for silicon independence.
