NITI Aayog Publishes India's Semiconductor Industry Roadmap

NITI Aayog Maps India's Path to Semiconductor Self-Reliance

India's policy think tank NITI Aayog published a landmark report on the future of India's semiconductor industry in May 2026, providing the most comprehensive government-authored assessment of the country's semiconductor ecosystem published to date. The report covers every segment of the chip supply chain from critical mineral extraction and semiconductor materials production through chip design, wafer fabrication, assembly and testing, to end-market deployment in automotive, consumer electronics, defence, industrial and AI infrastructure applications. It sets out a roadmap for achieving $100 billion in domestic semiconductor market size by 2030 and identifies the specific investment gaps, policy actions and human capital requirements needed to reach that target.

Key Findings on India's Semiconductor Position

The NITI Aayog report found that India's semiconductor ecosystem has made its most significant progress in chip design talent, where the country's contribution of approximately 20 percent of global design engineering workforce is a structural strength, and in assembly, test and packaging, where the ISM's first wave of approved projects has begun delivering operational manufacturing capacity. The report identified front-end wafer fabrication, semiconductor equipment manufacturing, and specialty chemical and materials production as the three segments where India's position remains most underdeveloped relative to the country's overall semiconductor ambitions.

The $150 Billion Investment Requirement

NITI Aayog estimated that India will require approximately $150 billion in total semiconductor ecosystem investment through 2035 to achieve its self-reliance and export ambitions, spanning wafer fabs, ATMP and OSAT facilities, equipment manufacturing plants, materials production, design center infrastructure, and human capital development. The report noted that the ISM 1.0 and ISM 2.0 commitments together represent a significant down payment on this investment requirement but argued that private sector capital mobilisation, foreign direct investment, and development finance institution lending will need to close a substantial portion of the remaining gap.

Human Capital: The Critical Constraint

The report identified human capital as the most immediate constraint on India's ability to execute its semiconductor manufacturing buildout at the pace envisaged by the ISM, noting that while India has a large engineering graduate output, the specific skills required for semiconductor manufacturing operations, including process engineers, equipment maintenance technicians, metrology specialists and cleanroom operators, are in short supply relative to the number of plants under construction or planned. NITI Aayog recommended a dedicated semiconductor workforce development program targeting 50,000 trained technicians and engineers by 2028, delivered through a combination of university curriculum upgrades, industry apprenticeships, and specialist training institutes.

Supply Chain Localisation Priorities

The report recommended a phased approach to supply chain localisation, prioritising high-value specialty chemicals and gases in the first phase, followed by equipment sub-components and wafer handling systems in the second phase, and comprehensive equipment manufacturing in the third phase. This sequencing reflects the differing capital requirements, technology barriers, and market size characteristics of each supply chain layer.

Policy Recommendations

NITI Aayog's report recommended an enhanced production-linked incentive structure for semiconductor equipment manufacturers, dedicated export credit facilities for Indian chip design companies targeting global OEM customers, a sovereign semiconductor reserve mechanism for critical chips used in defence and infrastructure, and a dedicated semiconductor diplomat program to support India's trade relationships with key semiconductor supply chain countries including Taiwan, South Korea, Japan, the Netherlands and the United States.