New Delhi is seeking to move beyond chip assembly, but its semiconductor ambitions remain exposed to imported materials, chemicals, gases and substrates.
India’s push to build a stronger semiconductor industry still hinges on a problem that is easy to overlook: its dependence on imported critical materials. Speaking at the Bloomberg New Economy Forum in New Delhi, Electronics and Information Technology Minister Ashwini Vaishnaw said the country must develop deeper domestic capacity in the materials, chemicals, gases and substrates that underpin chip production. He warned that when a handful of countries control the most important parts of the supply chain, the risk to industrial resilience rises sharply.
Vaishnaw’s comments came as India continues to broaden its semiconductor strategy beyond chip assembly and testing. The government approved Semicon 2.0 in July 2026 with an allocation of Rs1.27 lakh crore, with a larger emphasis on the supply chain that feeds fabrication plants. According to the minister, India’s next stage must move from assembling final products to building modules, components, materials and eventually capital equipment, a progression he said has taken other countries more than 20 years to establish.
The minister argued that technological sovereignty does not mean cutting India off from the global economy. Instead, he said the goal is to identify the most sensitive dependencies and reduce exposure where it matters most, while remaining an active partner in international value chains. LiveMint reported that India is looking at a 20- to 25-year horizon to cut critical technology dependencies and build resilience, rather than aiming for complete self-sufficiency.
India’s chip plan is also being tied to practical demand in the economy, not only to strategic ambition. Business Standard reported that the country wants to develop chips for cars, televisions, refrigerators and power infrastructure, extending its role in the semiconductor sector beyond design work and into fabrication, equipment and materials. That wider industrial base is meant to support sectors that depend on reliable supply and lower exposure to external shocks.
Vaishnaw also pointed to the changing nature of global manufacturing decisions. He said trust is becoming as important as cost in choosing technology partners, especially as geopolitical tensions and cybersecurity concerns shape sourcing choices. According to Indian Express, the government has already received investment proposals worth $11bn to $12bn under Semicon 2.0, suggesting that private capital is beginning to follow the policy push. For India, the challenge now is whether that interest can be converted into a durable ecosystem capable of supporting advanced manufacturing at home.
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