Three semiconductor facilities have begun commercial production, while new investments and design initiatives are expanding India’s capabilities across the chip value chain.
India is accelerating its push to become a global technology hub by expanding domestic capabilities in semiconductors, artificial intelligence (AI), advanced computing and chip design. The government is building an integrated ecosystem spanning semiconductor manufacturing, packaging, equipment, materials, AI infrastructure and indigenous AI models.
Under the first phase of the Semicon India Programme, the government allocated ₹760B to develop capabilities across the semiconductor value chain. The programme covers chip design, fabrication, packaging, testing, equipment, materials and skilled workforce development. Its second phase, Semicon India 2.0, received an approved outlay of ₹1.28T in July 2026, with a focus on chip design, semiconductor equipment and materials, fabrication, advanced packaging, R&D and talent development.
So far, 12 semiconductor projects have been approved across six states, involving investment commitments of more than ₹1.64T. The projects include silicon and compound semiconductor fabs, display fabrication and advanced packaging facilities. Three facilities have already begun commercial production, signalling a shift from policy announcements towards actual semiconductor manufacturing.
The government is also strengthening India’s chip-design capabilities. Under the Chips to Startup programme, EDA tools have been deployed across 320 academic institutions and more than 68,000 students have been trained. In addition, 24 semiconductor design projects have received financial support, while 105 startups and MSMEs have been supported with EDA tools under the Design Linked Incentive scheme.
By April 2026, 75 institutions had taped out 211 chips, while seven chips had been successfully fabricated at different technology nodes, including 12nm. Semicon India 2.0 is expected to further support semiconductor intellectual property, chip and system design.
India is simultaneously expanding its AI capabilities through the IndiaAI Mission, which has an outlay of about ₹104 billion. Shared AI computing capacity had crossed 45,000 GPUs by June 2026. By August, 237 projects had accessed subsidised computing, accounting for 9.32 million graphics processing unit (GPU) hours, helping researchers, startups and innovators access high-performance infrastructure.
The government has selected 20 indigenous foundation-model proposals from 506 applications, including 12 Large Multimodal Models and eight Small Language Models. AI Kosh had also accumulated more than 14,000 datasets and 331 AI models by July 2026. Meanwhile, IndiaAI initiatives had developed 62 AI prototypes and deployed 20 AI solutions across public-sector institutions.
AI infrastructure is also driving data-centre expansion. India’s installed data-centre capacity has increased from 375MW in 2020 to around 1575MW, with major hubs including Mumbai, Chennai, Hyderabad, Bengaluru, Delhi NCR and Gujarat. New investment destinations are emerging in states such as Andhra Pradesh, Madhya Pradesh, Chhattisgarh and West Bengal.
Together, India’s semiconductor and AI initiatives are moving beyond policy support towards manufacturing, computing infrastructure, indigenous technology development and commercial deployment. The government is positioning these sectors as complementary pillars of India’s long-term technology strategy and its ambition to participate more strongly in global technology value chains.
