Following an eventful year for India’s semiconductor sector, report predicts that the Union Budget 2025 will fulfil the industry’s need for increased government funding and improved infrastructure.
As the Finance Ministry gears up for the Union Budget 2025, reports suggest that India’s semiconductor industry is poised for substantial growth, owing to the government’s shift of focus in recent years.
According to the Economic Times, this gradual transition from semiconductor consumer to producer aims to reduce dependence on imports, encourage innovation, and capture a larger portion of the global market.
In the 2024-25 Union Budget, the Ministry of Electronics and Information Technology (MeitY) received ₹219.37 billion, a 52% increase from the previous year. Of this, ₹42.03 billion is allocated for critical semiconductor infrastructure, including fabrication plants, testing and assembly facilities, and outsourced assembly and test (OSAT) units.
These initiatives are designed not only to reduce India’s reliance on imported semiconductors but also to foster domestic innovation, create jobs, and enhance the country’s competitiveness.
Moreover, ongoing private investments have also driven India’s semiconductor growth, with ₹33 billion approved for Kaynes Semicon’s Gujarat plant, capable of producing 6 million chips daily. This is part of a ₹760 billion semiconductor development programme. Additionally, Tata Electronics and CG Power are setting up plants in Gujarat and Assam, collectively producing 70 million chips daily, boosting India’s semiconductor capacity.
As India continues to ramp up its semiconductor capabilities, the upcoming Union Budget 2025 may include further incentives, such as the Production-Linked Incentive (PLI) schemes, which are expected to benefit both domestic and international companies.
Looking ahead, the government’s strategy focuses on advanced infrastructure and attracting global investments. The IndiaAI mission, with a previous allocation of Rs 10,000 crore, aims to integrate AI technologies with semiconductors, creating a demand for more sophisticated components. Budget 2025 may further support these initiatives, bolstering India’s technological self-sufficiency.
The expansion of India’s semiconductor sector will create high-tech jobs, with growing demand for skilled professionals in design, fabrication, and assembly. Government initiatives like the IndiaAI FutureSkills programme aim to equip the workforce with essential skills. Job creation is expected across R&D, manufacturing, testing, and related industries as the sector develops.
However, challenges remain. According to ET, experts like Raja Manickam, founder of iVP Semi, have highlighted that India needs to address issues such as an advanced supply chain, enhanced R&D capabilities, and energy infrastructure.
The success of India’s semiconductor ambitions hinges on reliable energy infrastructure, continued investment, and strong policy support. The 2025 Union Budget is crucial for addressing these challenges, supporting domestic companies, and attracting international collaborations. These efforts will be key to consolidating India’s position in the global semiconductor market and achieving its goal of becoming a semiconductor powerhouse.
