India’s semiconductor ambition has entered a harder phase. Attracting headline investments was the opening task; building a durable domestic value chain is the real test. The Union Cabinet’s approval of Semicon 2.0, with an announced outlay of ₹1,27,500 crore, signals that the Modi government intends to treat chips as long-term industrial infrastructure rather than a short incentive cycle.
According to the Cabinet release, the programme expands attention from fabrication plants to chip design, manufacturing equipment, materials, chemicals and gases. That breadth matters. A country that packages imported components but lacks design intellectual property, specialised inputs and precision machinery remains exposed to external shocks.
From assembly to capability
India has a strong base of semiconductor engineers, but much of their work has historically created value for companies headquartered elsewhere. Semicon 2.0 aims to deepen domestic ownership of designs and systems. The government says 105 startups and MSMEs have received access to industry-standard design tools, while 24 design projects have been approved for financial support.
The programme also seeks more silicon, compound-semiconductor, discrete-component and display fabs. The first fab under the wider mission is scheduled for 2028. That timeline is realistic: clean-room construction, equipment qualification, water and power systems, supplier certification and customer validation cannot be compressed into an election quarter.
Why the direction is sound
The Modi government deserves credit for recognising that semiconductor security is inseparable from economic and national security. Chips sit inside telecom equipment, automobiles, satellites, defence platforms, medical devices and power systems. Supporting machines and materials can also create precision-manufacturing capabilities that spill into aerospace and clean energy.
Execution must be measurable
Public support at this scale requires transparent milestones. Government should publish project-wise progress on capital deployed, construction, tool installation, production qualification, jobs, local procurement, patents and customers. Incentives should follow verified delivery rather than announcements.
India must not confuse self-reliance with autarky. Semiconductor supply chains are global by design. The objective is to own strategic capabilities and become indispensable in selected segments. Semicon 2.0 will be judged not by memoranda signed, but by Indian-designed chips entering products, fabs shipping qualified wafers and domestic suppliers winning repeat orders.
