Can Modi’s US$15.2 billion chip bet turn India into a semiconductor powerhouse?

Modi’s government approved US$15.2 billion worth of investments in domestic semiconductor fabrication plants in February, including a proposal by local conglomerate Tata Group to build the country’s first ever major chip-making facility. It will be set up in Modi’s home state of Gujarat and is set to churn out 50,000 wafers per month by the end of 2026.

The investment also includes assembly units and a packaging plant that will be developed in conjunction with companies from Japan, Taiwan and Thailand.

Tata Group said it aims to propel India’s semiconductor industry to US $110 billion by 2030, targeting 10 per cent of global demand.

At the forefront of India’s semiconductor ambitions is India’s minister of electronics and information technology, Ashwini Vaishnaw, who said these investments were part of Modi’s efforts to “make India a big manufacturing hub and self-sufficient in some sectors”.

Vaishaw also oversaw a US$2.75 billion deal with US semiconductor company Micron Technology, which broke ground in September on a factory that is set to produce India’s first domestically manufactured microchips by the beginning of 2025.

Experts say these approvals align with India’s ambitious plan to build an end-to-end domestic semiconductor ecosystem – a strategic priority driven by the pandemic’s exposure of India’s over-reliance on global chip supply chains.

India is also hoping to capitalise on foreign firms seeking alternative manufacturing hubs, as trade and geopolitical tensions drive supply chain decoupling from China, which has long been a leader in the chip making industry.

The shift away from China, paired with surging demand for chips – which serve as a foundation for everything from smartphones to electric vehicles –