India’s semiconductor ambition has moved beyond announcing fabs and attracting investment. With all
six pillars of Semicon 2.0 now notified, the Government is attempting something harder: building an entire semiconductor ecosystem that can design, manufacture, package, and commercialise chips at scale.
That distinction is important. Semiconductor self-reliance cannot be achieved through fabrication plants alone. It requires design capability, equipment, specialised materials, advanced packaging, research institutions, skilled engineers and, crucially, commercially viable demand. Semicon 2.0 seeks to address these interlocking requirements through a broader industrial policy architecture.
From fabs to a full semiconductor ecosystem
The scheme is built around six pillars covering ten categories: design; machines and materials; additional fabrication facilities; assembly, testing, marking and packaging; research and development; and talent development.
This wider approach reflects an important policy learning. Countries do not become semiconductor powers merely by subsidising factories. The industry depends on highly specialised supply chains, intellectual property, engineering capability and continuous technological upgrading.
Semicon 2.0 therefore extends support across the value chain. Its design pillar includes semiconductor intellectual property, chips, system-on-chips and modules for strategic as well as commercial applications. It also provides for deployment-linked incentives, potentially addressing the long-standing gap between designing a chip in India and getting it adopted in commercial products.
The scheme also covers silicon fabs, compound semiconductors, photonics, sensors, MEMS, discrete semiconductors and display fabs. This gives India room to build capability in segments where domestic demand and industrial applications may offer faster commercial opportunities than competing immediately at the most advanced technology nodes.
Talent may be India’s strongest early advantage
The most striking progress so far is in human capital. Electronics and Information Technology Minister Ashwini Vaishnaw said India had trained 85,000 semiconductor engineers in four years, achieving a target originally set for ten years. The Government has now set a target of developing another one lakh engineers.
Equally significant is the geographic spread. Students from Tier-II and Tier-III cities have already designed more than 250 chips. This matters because a semiconductor ecosystem cannot remain confined to a few technology hubs if India wants scale.
The Government expects the sector to create around 50,000–60,000 direct jobs. It also believes that close to 10 per cent of the global semiconductor industry’s market could be located in India in the coming years.
These projections underline the scale of the opportunity, but they should also be treated as benchmarks against which implementation will eventually be judged.
Execution, not incentives, will decide success
The real challenge begins now. The India Semiconductor Mission will act as the nodal agency, appraising applications, recommending projects and overseeing implementation. Projects can generally run for up to six years, while applications will initially remain open for three years. A mid-term assessment is also planned after three years.
The Government points to faster approvals, including clearances granted within 200, 150 and even 90 days in some cases. One project reportedly began commercial production within 13 months of groundbreaking.
Speed will help, but semiconductor competitiveness ultimately depends on more than approvals and fiscal support. India will need dependable infrastructure, sustained R&D, strong industry-academia linkages, domestic supplier networks and companies capable of competing on cost, quality and technology.
Semicon 2.0 is therefore best viewed not as another subsidy programme, but as a test of India’s ability to build a complex technology ecosystem. The first phase established intent. The second will determine whether that intent can become durable industrial capability.
