NITI Aayog has outlined a roadmap for building a globally competitive semiconductor ecosystem, recommending significant public investment, policy stability, and institutional reforms to strengthen India's position in the sector.
In its recently released report, Future of India's Semiconductor Industry, NITI Aayog said India should aim to build a semiconductor value chain worth $120 billion to $150 billion by 2035. The report estimates that achieving this goal will require cumulative investments of approximately $135 billion to $180 billion over the next decade across semiconductor design, fabrication, advanced packaging, materials, and supporting infrastructure.
According to the report, the Government of India should commit at least one-third of the required investment to reduce project risks and support long-term investor confidence. It noted that such support could help attract large-scale private capital into the sector.
The report has proposed the establishment of an autonomous national semiconductor nodal agency with technical and financial authority. It also recommends implementing a single window clearance system and a fast track approval mechanism for semiconductor investments.
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According to the report, a multi-year semiconductor policy stability framework with defined review cycles should also be introduced. “This will help in faster decision making and reduced execution risk along with stronger investor confidence and accountability,” it said.
NITI Aayog has suggested replacing fragmented incentives with a tiered framework covering the entire semiconductor value chain. The proposed model would align incentives with factors such as capital intensity, technology risk, and strategic importance.
The report recommends linking incentives to measurable outcomes, including production capacity, manufacturing yield, localisation, and exports. It also calls for a ten-year policy horizon to reduce regulatory uncertainty.
“Notify a full-stack semiconductor incentive policy covering design, IP, fabs, OSAT, materials and equipment, introduce credit guarantees and off-take linked risk buffers for high capex projects and establish a continuous incentive effectiveness review mechanism,” the report said.
The report further stated that fabs, advanced packaging, compound semiconductors, and critical design infrastructure should be prioritised for public funding, supported by predictable incentives and coordinated execution across the semiconductor value chain.
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