India's Path to Self-Reliance in AI Hardware Amid Global Uncertainty

India is preparing for a future where self-reliance in AI hardware is crucial, with experts exploring the role of cloud infrastructure and homegrown innovation in overcoming barriers to self-reliance. Global uncertainty is reshaping the country's digital priorities, and experts will discuss how India can overcome challenges in this area. The ET Leadership Dialogues series will provide insights into India's digital future and its potential for growth.

India is preparing for a future where self-reliance in AI hardware is crucial, with experts exploring the role of cloud infrastructure and homegrown innovation in overcoming barriers to self-reliance. Global uncertainty is reshaping the country's digital priorities, and experts will discuss how India can overcome challenges in this area. The ET Leadership Dialogues series will provide insights into India's digital future and its potential for growth.

India's semiconductor sector is rapidly expanding, aiming to become a major player in the global market, which is projected to exceed US$1 trillion by 2030. With a solid policy foundation, large-scale investments, and international partnerships, India is transitioning from being a consumer to a key contributor in the global chip ecosystem. India’s semiconductor market, valued at approximately US$38 billion in 2023, is projected to grow to US$45–50 billion by the end of 2025 and further expand to US$100–110 billion by 2030 [1].

The country’s semiconductor strategy has moved beyond policy formulation into the implementation phase. Fabrication, design, and assembly hubs are being established across the country, setting the stage for large-scale production. These developments are not merely theoretical; they are supported by concrete, high-value investments. Major investments transforming the sector include Micron Technology’s ₹22,516 crore (US$2.71 billion) investment in Sanand, Gujarat, and Tata Electronics and Powerchip Semiconductor Manufacturing Corp. (Taiwan)’s ₹91,000 crore (US$10.96 billion) investment in Dholera, Gujarat [1].

India’s semiconductor strategy is deliberately built to reinforce every link in the chip-making value chain—equipment, materials, and services. India boasts a vibrant ecosystem of micro, small, and medium enterprises (MSMEs) that manufacture precision components for wafer-processing and fab instrumentation, supported by the Production-Linked Incentive (PLI) scheme for semiconductor equipment [1]. The subcontinent’s rich endowment of industrial chemicals, specialty gases, and minerals makes it a natural upstream supplier for chip fabrication, with domestic producers scaling up capacity under government-backed incentives [1].

India’s comparative advantage in talent and digital infrastructure positions it as a back-end powerhouse for R&D, design, testing, and related services. A workforce of over one million engineers skilled in AI, big data analytics, cloud computing, and IoT supports everything from chip design verification to yield optimization [1]. Leading integrated service providers and independent design houses leverage this expertise, offering end-to-end solutions, making India an indispensable partner for global chipmakers looking to accelerate time-to-market [1].

The India Semiconductor Mission (ISM), launched in December 2021, represents the government’s flagship effort to catalyze India’s emergence as a global electronics powerhouse. Backed by a ₹76,000 crore (US$9.2 billion) corpus, ISM provides targeted funding across three pillars—semiconductor fabrication, display manufacturing, and chip design [1]. ISM’s flagship funding, sector-specific PLI schemes, and infrastructure subsidies aim to attract global technology partners, nurture homegrown capabilities, and embed manufacturing competitiveness through well-calibrated incentives, thereby reinforcing the nation’s pursuit of technological self-reliance and supply-chain resilience [1].

India’s semiconductor trajectory is underpinned by a robust mix of targeted policy incentives and strategic international partnerships. SEMICON India offers performance-linked grants, capital subsidies, and fast-track clearances, while the India–US Initiative on Critical and Emerging Technology (iCET) collaborates on joint R&D, workforce development, and supply-chain diversification [1]. These initiatives demonstrate India’s balanced approach: attracting global technology partners, nurturing homegrown capabilities, and embedding manufacturing competitiveness through well-calibrated incentives.

As India prepares for a future where self-reliance in AI hardware is crucial, the semiconductor sector is at the forefront of this transformation. With robust policy backing, large-scale investments, and a focus on developing a competitive ecosystem, India is positioning itself to become a significant player in the global semiconductor market.

References:
[1] https://www.india-briefing.com/news/india-semiconductor-sector-outlook-2025-39067.html/