The proposed fund will offer subsidies for chip design projects, manufacturing equipment and semiconductor supply chain development
The move aligns closely with the Centre’s broader ambition to position India as a global semiconductor manufacturing hub
As per industry estimates, the Indian semiconductor market is projected to reach a size of $100 Bn–$110 Bn by 2030
The Indian government is reportedly planning to launch a massive ₹1 Lakh Cr ($10.84 Bn) fund to strengthen domestic chip production in the country.
The proposed fund — currently under deliberation — will offer subsidies for chip design projects, manufacturing equipment and semiconductor supply chain development, according to a report by Bloomberg.
The move aligns closely with the Centre’s broader ambition to position India as a global semiconductor manufacturing hub, amid rapidly growing domestic demand for chips.
As per industry estimates, the Indian semiconductor market is projected to reach a size of $100 Bn–$110 Bn by 2030. To support this growth, the government is looking to significantly ramp up domestic manufacturing capacity.
By 2029, the government expects India’s chip manufacturing ecosystem to cater to nearly 70–75% of the country’s domestic semiconductor demand.
Earlier, the government had rolled out the India Semiconductor Mission (ISM) in December 2021 with an outlay of ₹76,000 Cr to push domestic semiconductor production. The programme was designed to provide financial support for semiconductor fabrication, display manufacturing and chip design projects in India.
For 2026–27, the Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem in India has a total financial outlay of ₹8,000 Cr. The programme aims to accelerate capital investment, generate high quality employment, and expand domestic capabilities across fabrication, packaging, and chip design. The projected outcomes for the year are outlined below.
The next phase of the government’s semiconductor push — Semicon 2.0 — is expected to focus on advanced manufacturing capabilities, with a roadmap aimed at achieving 3-nanometre and 2-nanometre technology nodes.
The government had been considering a fresh allocation of $20 Bn (₹1.7 Lakh Cr) for ISM 2.0. Finance minister Nirmala Sitharaman confirmed during her FY27 Budget speech that the next phase of the programme will be launched soon but didn’t outline the size of the plan.
Investor interest in India’s semiconductor ecosystem is also gradually picking up. According to Inc42’s Annual Indian Startup Trends Report 2025, Indian semiconductor startups raised about $50 Mn in 2025, up from over $28 Mn in 2024.
Since the beginning of this year, startups such as C2i Semiconductors, Raana Semiconductors, and Agrani Labs have secured funding from various investors.
Beyond startups, global semiconductor companies are also expanding their presence in India. Micron Technology recently inaugurated its semiconductor assembly and test facility in Sanand, Gujarat. The facility has already begun commercial chip production and is expected to assemble and test tens of millions of chips on-site in 2026 before scaling further in the following years.
Meanwhile, IT minister Ashwini Vaishnaw has announced that Tata Electronics is working on its upcoming semiconductor fabrication plant in Dholera. The facility is expected to support Indian semiconductor startups in developing prototype chips.
Comments are closed.