India needs upto $180 billion semiconductor investments over a decade: NITI Aayog

Building a globally competitive semiconductor industry in India will require nearly US $135-180 billion of investments over the next decade to support design, fabrication, advanced packaging, materials and infrastructure, government think tank NITI Aayog said in a report released on Friday.

NITI Aayog said the union government should commit at least one-third of the required investment to de-risk projects and anchor long-term investor confidence. This, in turn, could draw private capital at scale, it added in the report titled, ‘Future of India’s semiconductor industry,’ released by finance and corporate affairs minister Nirmala Sitharaman and railways, information and broadcasting and electronics and IT minister Ashwini Vaishnaw.

Fabs, advanced packaging, compound semiconductors, and critical design infrastructure should be prioritised for public funding, the report said. Alongside funding support, the focus should also be on stability, predictable incentives and coordinated execution across the value chain, it added.

Building a strong semiconductor industry has become a priority for the Modi administration as computing power is driving not just the economic and industrial prowess of advanced nations but also their strategic and military capabilities. Semiconductors are also increasingly becoming a choke point in global trade, having been a point of friction in US-China trade relations in recent times.

NITI Aayog proposed that a government commitment of $45-60 billion over 10 years could work as anchor capital.

“Upstream materials and critical minerals are emerging as strategic chokepoints in the semiconductor value chain. India must proactively secure long-term access to these inputs,” the report said.

“Building a globally competitive ecosystem is hard to achieve in isolation. Deep, long-term partnerships are inevitable to build such ecosystems, owing to the scale, complexity and capital intensity of the semiconductor value chain. Partnerships are strategic instruments for India to accelerate capability building, de-risk investments and access frontier technologies,” NITI Aayog said.

“What India needs is a partnership strategy that goes beyond transactional cooperation and is centred on outcome-linked collaborations,” the report added, suggesting potential deals with countries such as the US, Japan, and South Korea, as well as the European Union.

As semiconductor technologies become increasingly shaped by export controls, technology blocs and national security considerations, India must position itself as a trusted, long-term partner within allied and friendly semiconductor ecosystems, it said.

Building an indigenous semiconductor ecosystem is one of the most strategically important industrial transformations of the next decade—more so as global supply chains realign and advanced electronics become central to economic competitiveness, NITI Aayog noted.

Expanding domestic manufacturing will reduce import dependence and create a resilient supply base for sectors such as telecom, automotive, defence and clean energy, it said, adding that the pace of progress in building the semiconductor ecosystem will depend on talent and research excellence.