India is setting up semiconductor factories. These are materials used in chips that power everything from phones to cars to fighter jets. India has imported semiconductors almost entirely for decades. That is now changing. On May 15, Rajasthan got its first semiconductor plant, Sahasra Semiconductors, in Bhiwadi. Three days later, Tata Electronics signed a landmark partnership with ASML, the Dutch giant that makes the world's most advanced chip-making machines, to build India's first full-scale commercial semiconductor fab in Dholera, Gujarat. Prime Minister Narendra Modi flew to the Netherlands to seal the deal. These are not small announcements. Read Full Story INDIA SPENDS BILLIONS ON IMPORTS In 2022–23, India spent $19.9 billion on imported semiconductors. By 2024–25, that had jumped to $30.3 billion. China is the principal supplier, sending chips worth over $11.8 billion annually. Add Hong Kong ($5.1 billion) and Taiwan ($3.5 billion), and these three sources alone account for nearly 68 per cent of India’s semiconductor imports. Korea, Singapore, and the United States make up most of the rest. Taiwan has seen the sharpest rise in exports to India, from $1.4 billion in 2022–23 to $3.5 billion in 2024–2. The US has also grown fast, from $281 million to over $1 billion in the same period. BUT WHY? That India makes almost none of its own semiconductors is a vulnerability, both economically and in terms of national security. If supply gets disrupted for any reason, India has no backup. But this dependency did not happen by accident. There is a specific reason India fell so far behind, and it goes back to a single night in 1989. India was once ahead in this field. In 1976, the government set up the Semiconductor Complex Limited in Mohali. But a fire destroyed the plant in 1989, and India lost valuable time while other countries moved ahead. Now, after decades of relying on imports, India is trying to rebuild its semiconductor industry. With new projects in Rajasthan and Gujarat and increased government support under the India Semiconductor Mission, the country is making its strongest push yet to reduce dependence on foreign chips. Over the past 12 years, India's electronics production has grown six times to nearly Rs 13 lakh crore. Finance Minister Nirmala Sitharaman announced the India Semiconductor Mission 2.0 in the Union Budget 2026–27. It started with Rs 1,000 crore. Industry response was strong enough that investment commitments came in at double the original target. The government then proposed raising the total outlay to Rs 40,000 crore. Ends
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