Namaste chip race : here comes India

Picture Credit: Built In

India is preparing to launch India Semiconductor Mission (ISM) 2.0, a major expansion of its semiconductor ambitions with a proposed $13.21 billion investment aimed at strengthening chip manufacturing, semiconductor design and critical supply chains. The initiative builds on the country's original semiconductor mission and forms part of a broader strategy to position India as a global technology manufacturing hub amid shifting geopolitical and supply chain dynamics.

The new programme comes alongside a separate ₹14,115 crore infrastructure package to improve road connectivity between Delhi and Uttar Pradesh's growing industrial corridors. Together, the investments are designed to attract global chipmakers, accelerate factory construction and create a more integrated ecosystem for semiconductor production. India has already secured major investments from companies including Tata Electronics, Micron and several international partners under the first phase of its semiconductor strategy.

The timing is significant. As multinational companies look to diversify manufacturing beyond China, India is positioning itself as an alternative destination for advanced electronics production. While China remains a global semiconductor powerhouse, export restrictions, geopolitical tensions and slowing economic growth have encouraged many technology firms to expand operations elsewhere. India hopes ISM 2.0 will help it capture a larger share of global semiconductor investment while reducing its dependence on imported chips.

For Sri Lanka, India's growing semiconductor industry presents both opportunities and challenges. A stronger Indian technology ecosystem could attract more investment, skilled professionals and global manufacturers to the region, potentially benefiting South Asian supply chains as a whole. Sri Lankan IT and business process outsourcing (BPO) companies may find new opportunities supporting semiconductor firms through software development, engineering services and back-office operations.

However, the expansion also increases regional competition for talent and foreign investment. As India accelerates its push into high-value technology manufacturing, neighbouring countries will need to strengthen their own investment climate and develop specialised capabilities to remain competitive. For Sri Lanka, leveraging its skilled workforce, strategic location and growing digital services sector could be key to benefiting from the next phase of South Asia's technology transformation rather than being left behind.