India’s Semiconductor Mission has approved five fabs and committed ₹76,000 crore in incentives. Examine the strategic logic, the demand-supply gap, and the policy risks of building chip sovereignty.

Introduction:

The India Semiconductor Mission, launched under MeitY in December 2021 with a corpus of ₹76,000 crore, has approved five fabrication and ATMP units — Tata-PSMC Dholera (28 nm logic), Micron Sanand, Tata-OSAT Morigaon, CG Power Sanand and Kaynes Sanand — committing investment of ₹1.5 lakh crore (PIB, March 2026).

Strategic logic: Global chip supply was disrupted by COVID-19 and the 2022 Taiwan contingency planning; the US CHIPS and Science Act 2022 ($52 bn) and EU Chips Act ($46 bn) reset state-backed industrial policy. India's mission aligns with QUAD Critical and Emerging Tech Working Group commitments and reduces import reliance — current chip imports were $28 bn in FY25 (DGFT data).

Demand-supply gap: Domestic semiconductor consumption will rise from $38 bn (2023) to $109 bn by 2030 (IESA-Counterpoint 2024). The five approved units cover only mature nodes (28 nm and above); leading-edge logic (sub-7 nm) remains absent, and the Compound Semiconductor Mission and the second tranche of ISM Phase-2 are awaiting Cabinet clearance.

Policy gaps: India lacks fab-grade ultra-pure water (8 million litres/day per fab), continuous power, ASML EUV access, and a deep talent pool — only 35,000 chip design engineers against a 2030 need of 1 lakh (NASSCOM 2024). The DLI scheme for design start-ups has approved 24 firms.

Way forward:

MeitY should clear ISM Phase-2 (₹40,000 crore additional) by FY27, integrate the Compound Semiconductor Mission, finance 85,000 Chips-to-Startup engineers under C2S, and align ISM with Skill India and IndiaAI Mission for sovereign capability.