The Union Budget 2025 is being prepared by Finance Minister Nirmala Sitharaman and her staff. India’s semiconductor sector, which is presently changing, may be one of the main areas of concentration. India has never produced semiconductor chips; instead, it has always been a customer. To lessen reliance on imports, promote innovation, and increase its market position in the global semiconductor industry, the Modi administration has been concentrating on creating an ecosystem for domestic semiconductor manufacturing in recent years.
How much was allocated to India’s semicon business in past budgets?
The semiconductor industry has received a significant increase in government union budget allocations in recent years. In the 2024–25 union budget, the Ministry of Electronics and Information Technology (MeitY) received Rs 21,936.9 crore, a 52% increase over the previous year. The Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India is a major factor in this increase. Of this, Rs 4,203 crore is set aside for the construction of vital semiconductor infrastructure, including Outsourced Semiconductor Assembly and Test (OSAT) facilities, Assembly, Testing, Marking, and Packaging (ATMP) facilities, and fabrication plants (fabs). In addition to reducing the nation’s dependency on imported semiconductors, these measures have increased India’s competitiveness internationally, encouraged innovation, and produced high-tech jobs.
Leading companies in the semiconductor industry in India
The government’s desire for significant private investments is a key component of India’s semiconductor aspirations. One example is Kaynes Semicon Pvt Ltd’s permission of Rs 3,300 crore to establish a semiconductor manufacturing facility in Gujarat. With a daily production capability of 60 lakh chips, this project is anticipated to serve industries including mobile phones, consumer electronics, communications, electric vehicles, and automobiles. The investment is also consistent with the larger semiconductor research agenda, which has Rs 76,000 crore allotted to it.
Major companies like Tata Electronics and CG Power also establish facilities around India, notably in Gujarat, Assam, and other key regions, in addition to Kaynes Semicon. Thanks to these investments, India could generate roughly seven crore chips per day, which are expected to total Rs 1.5 lakh crore. Through incentives like the Production-Linked Incentive (PLI) schemes, the union budget for 2025 might encourage these endeavours and let both domestic and foreign companies participate in India’s semiconductor ecosystem.
Union Budget 2025: How will the semiconductor sector fare going forward?
There is more to the government’s plan to support the semiconductor sector than just financial investments. Developing a sophisticated, scalable AI infrastructure under the IndiaAI mission is a key component of this strategy. The IndiaAI mission, previously given Rs 10,000 crore, intends to build the infrastructure required to enable AI, which is becoming increasingly integrated with semiconductor technology. Initiatives like the IndiaAI Compute Capacity and Innovation Centre, which are part of the goal, are anticipated to increase demand for more sophisticated semiconductor components, creating an environment conducive to the sector’s expansion. Budget 2025 may provide a boost for these programs.
Furthermore, the government’s emphasis on luring in international investment and lowering reliance on imported semiconductors demonstrates its goal of creating an ecosystem that can support itself. A significant contribution to India’s larger objectives of technological self-sufficiency may come with Budget 2025.
Government regulations of the semiconductor sector
According to a November analysis by NLB Services, the need for qualified experts in semiconductor design, fabrication, and assembly is anticipated to grow as the semiconductor industry grows. Additionally, government programs like the IndiaAI FutureSkills program are designed to ensure that India’s workforce has the skills to succeed in the semiconductor and digital industries. Budget 2025 may increase India’s chances of obtaining these with new funding.
India is well-positioned to create many job opportunities in fields like research and development, manufacturing, and testing by drawing in international chipmakers and supporting the expansion of domestic businesses. According to the research, these initiatives will increase exports and help the nation satisfy its local semiconductor needs. According to these estimates, Budget 2025 may be very important for strengthening India’s semiconductor dominance
