India is rapidly building a robust semiconductor and AI infrastructure through multi-billion-dollar investments, international partnerships, and innovative research programmes, aiming to reduce reliance on imports and strengthen its position in global technology supply chains.
India is rapidly knitting together a semiconductor and artificial intelligence ecosystem that officials say is intended to reduce dependence on imports, deepen domestic capability and lift the country’s position in global technology supply chains. The push now spans chip fabrication, design, advanced packaging, high-performance computing and AI research, with the government presenting the two sectors as mutually reinforcing pillars of industrial policy.
The semiconductor programme has moved beyond policy design into manufacturing. Authorities have approved 12 projects across six states, with commitments of more than Rs 1.64 lakh crore, and three facilities have already begun commercial production. Semicon 1.0 carried an allocation of Rs 76,000 crore to seed the ecosystem, while Semicon 2.0, approved in July 2026 with a budget of Rs 1,27,500 crore, broadens support to chip design, equipment, materials, fabrication, advanced packaging, research and development and skills.
According to the government’s update, the next phase is designed to serve industries from automobiles and telecommunications to aerospace, power electronics and consumer electronics. It covers silicon and compound semiconductor fabrication, display fabrication and advanced packaging, reflecting a wider effort to build a complete supply chain rather than rely on isolated manufacturing projects.
India is also trying to build stronger domestic design capability through programmes such as Chips to Startup. Electronic design automation tools have been rolled out across 320 academic institutions, more than 68,000 students have been trained and 24 design projects have received funding. The government says 105 start-ups and MSMEs have been supported with EDA tools under the Design Linked Incentive scheme, while by April 2026, 211 chips had been taped out by 75 institutions and seven had been fabricated at different technology nodes, including 12 nanometres.
International partnerships remain central to the effort. The government says India’s semiconductor ambitions are being supported by ties with the United States, Japan, Singapore, the Netherlands, Germany and the European Union. Semicon India 2025 drew more than 350 exhibitors and participants from 48 countries and regions, with 35,000 registrations and 30,000 physical attendees, and 12 memorandums of understanding were announced during the event.
On the AI side, the IndiaAI Mission, approved with an outlay of about Rs 10,372 crore, is expanding access to computing power, research tools and public-sector use cases. By June 2026, shared AI computing capacity had risen to more than 45,000 GPUs, and by August 237 projects had used subsidised computing resources for 93.18 lakh GPU hours. The government has selected 20 indigenous foundation model proposals from 506 applications, including 12 large multimodal models and eight small language models intended to better reflect Indian languages and local requirements.
The AI Kosh platform now hosts more than 14,000 datasets and 331 AI models, while IndiaAI initiatives have produced 62 prototypes and deployed 20 solutions in public institutions. The government has also approved 58 Artificial Intelligence Centres of Excellence across states and union territories, with 22 already under way in 13 states and Union Territories. Separately, the National Mission on Interdisciplinary Cyber-Physical Systems has set up 25 Technology Innovation Hubs working on AI, robotics, cybersecurity and quantum technologies.
The growth in AI is being matched by rising data-centre capacity. Installed capacity has climbed from 375 MW in 2020 to around 1,575 MW, with new investment destinations emerging in Andhra Pradesh, Madhya Pradesh, Chhattisgarh and West Bengal. India’s broader AI profile has also gained international attention: the Stanford Global AI Vibrancy Report 2025 ranked the country third globally for AI competitiveness and ecosystem vibrancy, while India was the second-largest contributor to GitHub AI projects in 2025, according to the government’s account. At the India AI Impact Summit 2026, delegations from more than 100 countries and 20 international organisations took part, and 92 countries and organisations adopted the summit declaration.
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