Semiconductor and AI Revolution: Building India’s Technology Leadership
India is accelerating its efforts to build a self-reliant, globally competitive technology ecosystem by integrating semiconductor manufacturing with artificial intelligence (AI) capabilities. Semiconductors form the backbone of modern technologies, while AI is driving demand for advanced processors, high-performance computing and specialised chips. The convergence of these two sectors is emerging as a strategic pillar of India’s technological self-reliance, resilient supply chains and innovation-led growth.
Semiconductor ecosystem: Strengthening technological self-reliance
The government’s semiconductor strategy is focused on developing capabilities across the entire value chain, including chip design, fabrication, advanced packaging, testing, equipment, materials, research and skilled manpower.
The Semicon 1.0 programme, backed by an outlay of ₹76,000 crore, laid the foundation for India’s semiconductor ecosystem. Building on this, Semicon India 2.0 received approval for an outlay of ₹1,27,500 crore in July 2026. The programme is structured around six strategic pillars—chip design, machines and materials, fabs, ATMP/OSAT, research and development, and talent.
Twelve semiconductor projects have been approved across six states, involving investments of more than ₹1.64 lakh crore. These projects cover silicon and compound semiconductor fabs, display fabrication and advanced packaging facilities. Three facilities have already commenced commercial production, indicating a shift from policy formulation towards actual manufacturing capacity.
Building domestic chip-design capabilities
India is also expanding its indigenous semiconductor design talent. Under the Chips to Startup (C2S) initiative, Electronic Design Automation tools have been made available across 320 academic institutions, with more than 68,000 students trained.
Under the Design Linked Incentive (DLI) scheme, 24 semiconductor design projects have received financial assistance, while 105 startups and MSMEs have received support for EDA tools.
By April 2026, 75 institutions had completed tape-outs of 211 chip designs, while seven chips had been successfully fabricated across different nodes, including advanced 12-nanometre technology. These developments strengthen India’s potential to emerge as a global hub for semiconductor intellectual property, chip and system design.
International cooperation
India is simultaneously strengthening semiconductor cooperation with major technology partners, including the United States, Japan, Singapore, the Netherlands, Germany and the European Union. Semicon India 2025 brought together participants and exhibitors from 48 countries and regions, demonstrating growing international interest in India’s semiconductor ambitions.
IndiaAI Mission: Building sovereign AI capabilities
Alongside semiconductor development, the IndiaAI Mission, approved with an outlay of approximately ₹10,372 crore, is creating the infrastructure and innovation ecosystem required for responsible and inclusive AI.
By June 2026, shared AI computing capacity had expanded to more than 45,000 GPUs. By August 2026, 237 projects had benefited from subsidised AI computing, accounting for 93.18 lakh GPU hours. This is intended to provide researchers, startups and innovators with affordable access to high-performance computing for AI model development, training and testing.
Indigenous foundation models and AI infrastructure
The government has selected 20 proposals for indigenous foundation models from 506 applications. These include 12 large multimodal models and eight small language models, with an emphasis on Indian languages, requirements and contexts.
The AIKosh platform had more than 14,000 datasets and 331 AI models by July 2026, providing resources for developers, researchers and innovators.
IndiaAI initiatives have also produced 62 AI prototypes, while 20 AI solutions have been deployed in public-sector institutions. Eleven national-level hackathons and innovation challenges are further supporting the transition from ideas to practical applications.
AI Centres of Excellence and responsible AI
By August 2026, 58 AI Centres of Excellence had been approved across states and Union Territories, with 22 centres in 13 states/UTs already approved and operational work underway.
The government is also focusing on responsible and trustworthy AI. Thirteen projects have been approved under the safe and trusted AI pillar, addressing issues such as bias mitigation, machine unlearning, deepfake detection, privacy-preserving AI, explainability and AI-risk assessment.
Expanding digital infrastructure
India’s data-centre capacity has increased substantially, from approximately 375 MW in 2020 to around 1,575 MW. Major data-centre hubs include Mumbai, Navi Mumbai, Chennai, Hyderabad, Bengaluru, Delhi-NCR and Gujarat, while states such as Andhra Pradesh, Madhya Pradesh, Chhattisgarh and West Bengal are emerging as new investment destinations.
Global technology positioning
India has strengthened its international standing in AI and technology. The Stanford Global AI Vibrancy Report 2025 ranked India third globally in AI competitiveness and ecosystem vibrancy. India was also the second-largest contributor to GitHub AI projects in 2025, highlighting the strength of its developer and innovation ecosystem.
The India AI Impact Summit 2026 brought together delegations from more than 100 countries and 20 international organisations, with 92 countries and organisations adopting the summit declaration. India’s participation in the Pax Silica coalition further supports efforts to develop resilient global silicon supply chains.
Governance perspective
India’s semiconductor and AI strategies represent an integrated approach to technology governance, economic security and strategic autonomy. Semiconductor manufacturing provides the hardware foundation, while AI infrastructure, indigenous models, data resources and responsible-AI frameworks create the software and computational layer.
The government’s focus on domestic manufacturing, R&D, talent development, startup support, international partnerships and responsible technology governance is aimed at reducing strategic dependencies while expanding India’s role in global technology value chains.
As India moves towards its centenary of independence, the convergence of semiconductors, AI, advanced computing and digital infrastructure can become a major driver of innovation, high-value employment, industrial competitiveness and the broader vision of Viksit Bharat.
