India’s Budget 2026 Set to Fuel Semiconductor Industry Expansion and…

Sarah J · 2026-01-23T17:05:55.000Z

India’s Union Budget 2026 is expected to play a pivotal role in shaping the country’s semiconductor industry as it transitions from emerging ecosystem to significant global player. With the government aiming to position India among the world’s top chip manufacturing hubs by 2032, the upcoming budget is seen as a critical moment to sustain momentum and reaffirm policy support for the semiconductor value chain. Semiconductor projects by major industry players including Micron, Tata, Kaynes and CG Power are already underway, with some facilities expected to begin commercial production during 2026. These investments span fabrication, assembly, testing and packaging, representing multi-thousand-crore capital commitments in states such as Gujarat, Assam, Uttar Pradesh and Odisha. Industry experts emphasise that the Budget must ensure continuity and enhancement of incentives, particularly under the India Semiconductor Mission, to prevent momentum loss and encourage long-term capital deployment. They argue that direct capital subsidies essential for high-cost chip manufacturing should remain a priority, and that faster, predictable disbursement of incentives will be critical as projects enter active build-out phases. In addition to manufacturing support, there is growing industry advocacy for expanded design-linked incentives (DLI) to nurture India’s chip design ecosystem, where domestic talent has already made strides in ASICs and other specialised components. Experts also highlight the need for stronger testing and certification infrastructure and dedicated semiconductor-ready clusters with plug-and-play utilities to accelerate execution and support smaller players and startups. The semiconductor sector’s expected growth aligns with broader forecasts that India’s domestic semiconductor market could surpass $100 billion by 2030, driven by demand from electronics, telecom, electric vehicles, AI workloads and data centre expansion. Incentive continuity in Budget 2026 along with targeted policy support is viewed as vital to help India capture a larger share of global semiconductor production and reduce reliance on imports.

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India’s Budget 2026 Set to Fuel Semiconductor Industry Expansion and… | SEINET