India Needs AI, Chip Manufacturing Boost to Stay Globally Competitive

Chief Economic Advisor, V. Anantha Nageswaran, has emphasised the urgent need for India to scale up efforts in artificial intelligence (AI) and semiconductor manufacturing to remain competitive with global leaders such as the United States and China.

Speaking at the 2025 Emkay Confluence in Mumbai, Nageswaran warned that while traderelated problems are important, they shouldn't eclipse other more urgent ones. He observed that while China has increased chip manufacturing under government-sponsored projects, the United States leads in artificial intelligence research and chip design via businesses such as Nvidia, Intel, and AMD. Notwithstanding programmes like the Semicon India initiative, which seeks to boost local manufacturing, India still depends greatly on imports for chips and AI hardware.

The Cabinet Committee on Economic Affairs sanctioned recently Rs 4,600 crore for four semiconductor projects under the India Semiconductor Mission across Odisha, Punjab, and Andhra Pradesh.

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Nageswaran discussed major issues for the industry, including energy change, energy security, economic effects of artificial intelligence, and sectorwide cooperation. He asked for greater cooperation between the public and private sectors, encouraging the latter to go above quarterly revenues and dedicate themselves to national goals.

The CEA on the policy front emphasized the necessity of balancing economic activity with deregulation and investment promotion. The significant middleclass tax cut suggested in the FY26 Budget could stimulate development, he linked last year's decline to tight credit and liquidity restrictions.

Nageswaran also noted a change in urban consumption from listed to unlisted companies and underlined the need of better data on service consumption.