India Expands Semiconductor Investments With New Projects and Incentives

India has increased its focus on domestic semiconductor manufacturing, with new projects and policy support aiming to strengthen the country’s position in the global electronics supply chain.

The India Semiconductor Mission (ISM) began in 2021, allocating around ₹76,000 crore to encourage investments in semiconductor and display production. The scheme includes fiscal support covering up to half the cost of eligible silicon CMOS wafer fabrication units, aiming to attract both domestic and international companies.

By late 2025, ten semiconductor projects had received approval under ISM, spanning six Indian states and representing total investments above ₹1.6 trillion. These initiatives include both manufacturing and research facilities, with a mix of local and international partnerships involved.

Tata Electronics, together with Powerchip Semiconductor Manufacturing Corp from Taiwan, is constructing a fabrication plant in Dholera, Gujarat. The facility is designed for a monthly capacity of up to 50,000 wafers and involves an investment of about ₹91,000 crore. In Assam, Tata Semiconductor Assembly and Test is developing a facility valued at approximately ₹27,000 crore, which is projected to create numerous direct and indirect jobs.

What the numbers show

• ISM launched in 2021 with an initial outlay of ₹76,000 crore
• Ten semiconductor projects approved with investments over ₹1.6 trillion by late 2025
• About 97% of the ₹650 billion allocated for incentives committed by October 2025

L&T Semiconductor Technologies has announced plans for a US$10 billion fabrication plant, with the project’s progress depending on the company reaching US$1 billion in annual revenue by the 2026-2027 fiscal year. According to the company, government support could cover up to 90% of the plant’s cost if these conditions are met.

In January 2026, KLA Corporation opened a research and development hub in Chennai, investing ₹300 crore. The facility is focused on software and artificial intelligence, aiming to contribute to India’s growing semiconductor ecosystem.

The Union Minister for Electronics and IT stated that India is preparing to introduce its first domestically produced semiconductor chip using 28-90 nm technology by the end of 2025. Additionally, the Vikram 3201, developed by ISRO and the Semiconductor Laboratory, became the country’s first fully indigenous 32-bit space-grade microprocessor when it was unveiled in September 2025.

By October 2025, nearly all of the ₹650 billion allocated for semiconductor production incentives under ISM had been committed. These developments reflect the increasing number of projects and partnerships in India’s semiconductor sector, supported by both government and private investment.

* This article is based on publicly available information at the time of writing.