Promise of chips: India Semiconductor Mission Phase II and the road ahead

India’s semiconductor ambitions are no longer a passing headline. They are increasingly being treated as a multi-year industrial project—one that links manufacturing, research, talent, and supply chains. The discussion around the India Semiconductor Mission (ISM) Phase II reflects this shift: moving beyond announcements to the practical work of building a durable chips ecosystem.

From a national perspective, chips are now viewed as strategic infrastructure. They underpin phones and laptops, but also power sectors central to India’s growth story—automotive, clean energy, telecom networks, industrial automation, defence electronics, and digital public services. That makes semiconductor capability not just a technology aspiration, but a competitiveness and resilience goal.

From “chip obsession” to an industrial plan Semiconductors are among the most complex products ever built. Fabrication involves high-capital facilities, extremely precise processes, and years of operational learning. A realistic approach, therefore, is not to treat chipmaking as a single factory decision, but as a broader ecosystem challenge.

Phase II conversations indicate that India’s approach is evolving toward that ecosystem lens: aligning incentives, strengthening implementation capacity, and improving the ability to attract and retain long-term investors and technology partners. This is important because the semiconductor value chain is not one industry—it is many interconnected ones: materials, chemicals, specialty gases, silicon wafers, equipment, packaging, testing, design, and logistics.

Even in the best-run global hubs, it takes time for these layers to mature. For India, the opportunity is to compress timelines by leaning on existing strengths: a large engineering talent pool, globally recognised chip design expertise, a growing electronics manufacturing base, and policy attention that aims for continuity rather than episodic focus.

What Phase II can prioritise for long-term success The most constructive way to read Phase II is as a chance to deepen what makes semiconductor projects actually work on the ground.

**First, clarity and consistency.** Investors in fabs, packaging units, and upstream supply chain need predictable policy signals, fast clearances, and coordination across Centre and States. Semiconductor plants have demanding requirements—reliable power, water, high-quality infrastructure, and tight environmental compliance. When implementation systems are stable and responsive, the ecosystem becomes easier to build.

**Second, focus on the full stack—especially assembly, testing, and packaging.** Globally, packaging has become more advanced and strategically valuable. Strengthening this segment can be a practical route to scale manufacturing capability while creating skilled jobs and linking India’s design strengths with production.

**Third, workforce and R&D as core infrastructure.** Semiconductor manufacturing is not only about machines; it is also about process engineers, tool experts, quality systems, and long-term operational excellence. India’s institutions and industry can use Phase II to push targeted skilling, faculty-industry collaboration, and applied research that supports manufacturing outcomes.

**Fourth, integration with demand.** One way to make investments sustainable is to connect domestic capability with credible demand in sectors where India is growing: EVs, renewable energy, telecom, consumer electronics, and industrial digitisation. Anchoring demand helps facilities move from “project mode” to “production mode,” creating repeatable value.

A constructive national opportunity Semiconductors are a global arena shaped by partnerships, geopolitics, and supply-chain realignments. For India, the constructive opportunity lies in being a trusted, capable participant—offering manufacturing and innovation capacity that complements global value chains.

If Phase II builds on lessons from early initiatives—tight project selection, stronger execution, and systematic ecosystem building—India can expand beyond being a design powerhouse to becoming a more complete semiconductor hub. The payoff is not only in chips, but in jobs, higher-value manufacturing, export potential, and deeper technological self-reliance.

**Why it matters:** Chips sit inside almost every modern product. A steady, ecosystem-first Phase II can help India build resilience, create high-skill employment, and support faster growth in electronics, mobility, energy and digital infrastructure—without treating semiconductors as a short-term trend.