Whalesbook
India Strengthens Electronics and Advanced Materials Push
India is strengthening its position in electronics system design and manufacturing (ESDM), supported by strong policies and major investments. The Ministry of Electronics and Information Technology (MeitY) is driving initiatives to build a comprehensive semiconductor and electronics ecosystem. This push focuses not only on production but also on innovation in advanced materials, highlighted at GraphIN 2026, the first international conference on Graphene and 2D Materials held in India. These actions support key programs like 'Make in India' and 'Digital India' to boost domestic manufacturing and exports.
Semiconductor Ambitions: Investment and Growth Plans
The India Semiconductor Mission (ISM) is key to India's strategy, having approved ten semiconductor manufacturing projects worth about ₹1.6 lakh crore (US$19.2 billion) across six states. The government provides substantial financial support, covering up to 50% of project costs for silicon fabs and related facilities. The Design Linked Incentive (DLI) Scheme also supports domestic startups and MSMEs with financial incentives, including up to 50% reimbursement for product design costs (capped at ₹15 crore) and sales-based incentives. These steps aim to cut import reliance and move India into higher-value parts of the global semiconductor market. The wider Modified Programme for Semiconductors and Display Fab Ecosystem plans over US$10 billion in investments to make India a global ESDM hub. India's domestic semiconductor market was valued at roughly US$38 billion in 2023 and is expected to hit US$100-110 billion by 2030, showing strong growth potential. Still, the country imports 90-95% of its semiconductor chips.
Graphene's Promise: From Lab to Industry
Discussions at GraphIN 2026, including insights from Nobel laureate Kostya Novoselov, showed graphene's progress from a lab concept to a material with immense technological potential. Its superior electronic, thermal, and mechanical qualities make it crucial for future technologies. However, moving from scientific promise to broad industrial use faces significant hurdles. These include the high cost and difficulty of producing quality graphene commercially, maintaining precision, and ensuring consistent material properties at scale. Price competition also means adoption is mainly in specialized, high-value uses, as many industries can get similar results with cheaper, standard materials. Despite these issues, the global graphene market is growing, expected to increase from $1.32 billion in 2024 to $2.98 billion by 2028.
Sector Performance and Market Context
India's ESDM sector is showing strong growth, with electronics exports reaching US$23.57 billion in 2023. The broader Indian stock market, tracked by the NIFTY 50 index, fell 1.27% on March 6, 2026, closing at 24,450.45, with a P/E ratio of 21.39 on the same day. While precise financial figures for companies directly involved in these specific initiatives fluctuate, major players in electronics manufacturing such as Dixon Technologies, Syrma SGS Technology, and Kaynes Technology highlight the sector's potential. Government policies, including the National Policy on Electronics 2019 (NPE 2019) and various Production Linked Incentive (PLI) schemes, continue to encourage domestic production.
Key Challenges and Global Competition
Despite India's significant efforts, becoming a major semiconductor and advanced materials producer is challenging due to intense global competition. Semiconductor manufacturing is dominated by Taiwan, South Korea, and China. The US and EU are also investing heavily with programs like the CHIPS Act to boost their own production. China focuses on self-sufficiency, though it trails in cutting-edge chip technology. India faces risks from its dependence on foreign technology for advanced manufacturing, alongside the massive investment and long timelines required. Developing a skilled workforce is also difficult, as India's manufacturing has traditionally focused on low-value assembly, leading to persistent labor shortages. For graphene, high production costs and scaling difficulties limit its use in mass-market products, with sales mainly focused on raw materials. Global trade issues and geopolitical tensions add further complexity to supply chains.
Looking Ahead: Policy Support and Growth Drivers
India is planning the next stage of its semiconductor growth with India Semiconductor Mission (ISM) 2.0, indicating continued policy support for the next five to six years. This ongoing commitment aims to build on the progress of the first mission and solidify India's technological self-reliance. The government also plans to ensure affordable access to computing power for AI applications, offering it at much lower rates than globally. Future growth is expected from rising domestic demand, government incentives, and international partnerships, positioning India as a key player, not just a consumer, in the global chip industry.