India's Semicon 2.0 Plan: Rs 1.27 Lakh Crore Investment to Reduce Chip Dependency

The Government of India has announced Semicon 2.0, a comprehensive policy framework allocating Rs 1,27,500 crore to boost the country's semiconductor ecosystem. This represents India's most ambitious effort to date to reduce reliance on imported chips and establish domestic manufacturing capacity.

Background: India currently imports 95% of its semiconductors, making it vulnerable to global supply chain disruptions. The original Semicon India scheme (2019) allocated Rs 76,000 crore but faced implementation challenges. Semicon 2.0 incorporates lessons learned and expands scope across design, manufacturing, and testing.

Key Components: (1) Manufacturing incentives for fabs and assembly units, (2) R&D support for indigenous design and technology development, (3) Testing and packaging facility subsidies, (4) Workforce training programs, (5) Infrastructure development in designated clusters.

Why It Matters: Semiconductor self-sufficiency is critical for India's technological sovereignty, defence capabilities (military hardware), and digital economy. China controls 54% of global chip production; India aims to capture 2-3% by 2030.

Exam Angle: Expected questions on industrial policy, Make in India, technology sovereignty, geopolitical implications of chip wars, comparison with US CHIPS Act, and strategic sectors under National Security Framework.