India’s semiconductor industry is urging the government to introduce targeted financial incentives—including capital subsidies, tax rebates, and power cost support—to strengthen the broader semiconductor ecosystem beyond just fabs and ATMP units. The demand comes as India moves into the next phase of the India Semiconductor Mission (ISM 2.0).
Industry players highlighted that while current policies strongly support chip fabrication and packaging, there is limited support for upstream ecosystem segments such as high-purity gases, chemicals, materials, and equipment, which are critical for semiconductor manufacturing.
Experts also emphasized the need for localisation and co-location of suppliers (e.g., gas and chemical plants near fabs), faster customs clearance, and infrastructure support to ensure uninterrupted operations. Currently, over 90% of these inputs are imported, creating a key vulnerability in India’s semiconductor supply chain.
Why This Matters
• Highlights the need to build a complete semiconductor ecosystem beyond fabs
• Reduces dependence on imported materials, gases, and equipment
• Strengthens India’s supply chain resilience and manufacturing readiness
• Supports long-term success of the India Semiconductor Mission (ISM 2.0)