When Prime Minister Narendra Modi in his Independence Day address spoke of a Made-in-India semiconductor chip becoming a reality, he was articulating more than an industrial goal. He was defining a new pillar of national security. In a world fractured by geopolitics, the ability to not just use but to influence and control the technology that powers our future is a matter of sovereignty. He recalled how past efforts to build chip manufacturing were blocked. India has identified this as a challenge and committed itself to the arduous journey of semiconductor self-sufficiency.
Initial steps are underway. Across India, a concerted policy push is taking shape. The government launched the India Semiconductor Mission in 2021 to create a full ecosystem. Policies offer production-linked incentives and 50% capital aid for components and chips. To begin with, the plan is to make less advanced nodes, focusing on packaging and testing operations, where barriers are lower. While incentives were used to draw private firms, events were hosted to attract foreign companies with technology and funds, even as talent is being developed through educational and skilling plans. Now we must align the efforts of the Centre and states for fast action.
We have seen the foundation of a landmark fabrication plant by the Tata Group in Gujarat and a major packaging facility by Micron taking shape in Sanand. Each of these conventional steps is essential. They must all be pursued with relentless focus and flawless execution.
But as we celebrate this resolve, we must be brutally honest about the mountain we have chosen to climb. This is a journey of immense length and cost, with few short-cuts. We need only look at China, which began its determined push for self-sufficiency over a decade ago. After investing well over $100 billion and mobilizing the full power of the state, it has made enormous progress. Yet, it remains years and multiple technological generations behind the cutting edge. Resolve and policy alone are not enough.
The greater challenge is that the target is not stationary. It is galloping away from us. The world’s leading chipmakers in Taiwan, South Korea and the US are investing hundreds of billions of dollars to push the frontiers of physics and engineering ever further. This creates a dangerous paradox. If today we are theoretically $100 billion and 10 years behind the cutting edge, it is entirely possible that after five years and $50 billion of our own investment, we may find ourselves $200 billion and 15 years behind. Our progress may not be enough to even slow the widening of that gap.
This reality does not call for despair. It calls for a bolder and more creative strategy to complement our domestic efforts. It requires us to deploy our most unique and potent national asset: our deep well of private risk capital. While our government faces many demands on its fiscal resources, India’s private economy and capital markets are brimming with investors who show a remarkable appetite for risk in their quest to participate in world-changing technologies. This is a strategic advantage few other nations possess.
Private capital by itself cannot lure the world’s best technology to our shores overnight. But what if we created a new paradigm? Imagine a new kind of strategic investment vehicle, a fund structured like a sovereign entity but capitalized by private Indian wealth. Its mandate would not be to build factories at home, but to strategically deploy capital abroad. It would invest in a select portfolio of the world’s most innovative and cutting-edge semiconductor companies—those that are defining the next generation of technology.
This approach would transform our strategic calculus. Instead of parking our nation’s vast foreign exchange reserves in low-yield foreign government debt, we could create pathways for a portion of our private capital to go into acquiring meaningful stakes in global technology leaders. The objective would be more than just financial returns; it would be strategic influence. With significant ownership comes a seat on the board, a voice in the boardroom and a powerful say in a company’s direction.
It is a pathway to securing access to critical technology, understanding innovation roadmaps from within firms and lowering long-term vulnerability.
History teaches us that rising powers have always acted beyond their borders to secure access to the resources critical for their future. For centuries, this meant securing raw materials or trade routes. Many of the successful East Asian economies built their industrial might by strategically acquiring assets and know-how from abroad. In the 21st century, the most vital strategic resource is technology.
Semiconductors are the first and most crucial arena where India must apply this forward-thinking global strategy. Our path to true self-sufficiency cannot be paved by concrete and steel within our borders alone. It must also run through the world’s most advanced laboratories and corporate boardrooms, secured by the strategic deployment of our own capital. To build a secure future at home, we must begin to invest boldly abroad.
