Economic Survey says India's semiconductor, electronics push augurs well

These initiatives, the survey said, position India among a relatively small group of middle-income, industrialising economies that are steadily moving towards sophisticated production structures

India’s initiatives in the semiconductor and electronics manufacturing space -- through mission-driven, industry-linked research and development -- signal a shift towards the government concentrating resources in priority domains, the Economic Survey for 2025-26 has said.

 

According to the Survey, these initiatives position India among a relatively small group of middle-income industrialising economies that are steadily moving towards sophisticated production structures.

 

“As execution accelerates and capacity expands, these measures are expected to strengthen domestic semiconductor capabilities, enhance the resilience of critical supply chains, and position India as a significant participant in the global semiconductor marketplace,” the Survey said.

 

As of January 2026, India has approved 10 projects with a cumulative investment of ₹1.60 trillion under the flagship ₹76,000 crore India Semiconductor Mission (ISM).

 

 

The ISM is likely to serve India well in addressing the structural vulnerabilities and building resilience against shocks to global supply chains, the Survey noted.

 

“Recent geopolitical events underscore a broader lesson: Economies that depend on external access to foundational technologies increasingly face constraints not just in production, but in strategic autonomy. As advanced economies accelerate investments in semiconductor capacity and tighten export controls, access to chips becomes a determinant of competitiveness and also national security,” the Survey said.

 

Apart from developments in the semiconductor space, India’s electronics sector has undergone a structural transformation in recent years and has become the third-largest and fastest-growing in financial year 2025-25 (FY25). 

 

The momentum continued in the first half of the ongoing financial year, with electronics exports reaching $22.2 billion, positioning the sector as the second-largest export category. 

 

“This growth is underpinned by a remarkable surge in domestic production and export volumes. Central to this expansion is the mobile manufacturing segment, which witnessed a nearly 30-fold increase in production value, rising from ₹18,000 crore in FY15 to ₹5.45 trillion in FY25,” the Economic Survey said. 

 

India has transitioned from a net importer to the world’s second largest mobile phone manufacturer. The country now has over 300 manufacturing units, up from two in 2014, the survey said.

 

The Survey also noted that the government recognises the challenges inherent in building a competitive electronics manufacturing ecosystem, including the need for large capital investment, economies of scale, long gestation periods, access to cutting-edge technologies, and a highly skilled workforce. 

 

To help Indian manufacturing firms overcome these barriers, the government has taken initiatives to strengthen electronics manufacturing in the country, which include the PLI scheme for large-scale electronics manufacturing, PLI scheme 2.0 for IT hardware, electronics component manufacturing scheme, electronics manufacturing clusters, scheme for promotion of manufacturing of electronic components and semiconductors and modified programme for development of semiconductors and display manufacturing ecosystem.