India's 2035 Semiconductor Strategy: Implications for AECM Industry

India's recent unveiling of its semiconductor ambitions aims to transform the country into a leading player in chip design and manufacturing by 2035. This strategic move, highlighted in a report by NITI Aayog, outlines a roadmap to establish a $120 billion to $150 billion semiconductor value chain. For stakeholders in the AECM industry, understanding India's trajectory and its potential impact on global supply chains is crucial.

What Happened
In May 2026, NITI Aayog published a comprehensive report titled "Future of India’s Semiconductor Industry," detailing India's aspirations to become a global leader in semiconductor design and system architecture. The strategy focuses on leveraging India's strengths in chip design talent and a skilled workforce, while also aiming to become a top-three destination for Outsourced Semiconductor Assembly and Test (OSAT) and advanced packaging. The report emphasizes areas critical to India's economic growth, such as mature-node logic and compound semiconductors like silicon carbide and gallium nitride.

India's plan is not just about scaling up manufacturing capabilities but also setting global standards, shaping supply chains, and becoming a trusted supplier of critical semiconductor materials. The initiative is backed by government incentives, including the India Semiconductor Mission, and aims to foster an environment conducive to innovation and inclusivity.

What This Means for Your Business
For US AECM businesses, India's semiconductor ambitions present both opportunities and challenges. The focus on mature-node logic and specialty chips aligns with the growing demand for semiconductors in various industrial applications, including automotive and IoT devices. Companies engaged in manufacturing and engineering can explore partnerships or collaborations with Indian firms to tap into this burgeoning market.

Additionally, the geopolitical alliances, such as those involving Tata and ASML, indicate a shift towards more diversified supply chains. This could mean more competitive pricing and potentially lower costs for US companies sourcing semiconductor components. However, businesses must also be prepared for increased competition as India seeks to establish itself as a hub for chip design and manufacturing.

Compliance officers should monitor developments in India's regulatory landscape, particularly concerning intellectual property and technology trans