India's Semiconductor Ambitions: Building A Global Hub for Innovation And Manufacturing

The Growing Semiconductor Industry in India

Semiconductors: The Core of Modern Technology

Semiconductors, also known as chips, are vital components in a wide range of products, from computers and cloud servers to smartphones, electronic appliances, medical devices, automotive systems, and industrial automation. These chips, essential for transistors, diodes, and integrated circuits (ICs), form the backbone of modern electronics. Given their strategic and economic significance, only a handful of countries have established semiconductor manufacturing capabilities. Others are striving to reduce their dependence on imports and achieve self-sufficiency. India, currently reliant on imports from Taiwan, China, Korea, and Vietnam, is making rapid strides to become a key player in the global semiconductor industry.

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Scope of the Indian Semiconductor Industry

According to a Deloitte report, India's semiconductor market is expected to reach $55 billion by 2026 and grow to $100.2 billion by 2032. Over 60% of this growth will be driven by industries such as smartphones, wearables, electric vehicles (EVs), computing, and data storage.

Indian Government’s Focus on the Semiconductor Sector

In 2021, the Indian government approved a $10 billion initiative to promote semiconductor manufacturing, attracting substantial investments. The initiative is part of the country's efforts to become a global electronics manufacturing hub, with incentives worth $30.16 billion. A significant milestone came on December 15, 2021, when the government launched a $10 billion package to boost semiconductor and display manufacturing, offering attractive incentives for Silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensors, and semiconductor design.

To further strengthen the ecosystem, the government launched the "India Semiconductor Mission (ISM)," led by global industry experts. This mission aims to implement long-term strategies for a sustainable semiconductor and display ecosystem. By April 30, 2021, more than 20 semiconductor companies had expressed interest in setting up manufacturing plants in India. Additionally, the Ministry of Electronics and Information Technology (MeitY) is encouraging domestic companies, start-ups, and MSMEs to participate in the Design Linked Incentive (DLI) scheme, which supports chip design, product development, and deployment.

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Revised Program for Semiconductor and Display Manufacturing

On September 21, 2022, the Indian government revised its semiconductor program, offering uniform fiscal support of 50% of the project cost across all technology nodes for setting up semiconductor fabs. This support extends to advanced packaging and compound semiconductors, further incentivizing capital expenditure.

Current Semiconductor Facilities in India

India has established five semiconductor manufacturing units, with new facilities on the way. Here are some key developments:

Tata Electronics, in partnership with Powerchip Semiconductor Manufacturing Corporation (PSMC), is building an $11 billion semiconductor fab in Dholera, Gujarat. The facility will produce 28 nm chips, primarily for automotive, computing, and AI industries. However, it will not produce cutting-edge nodes due to technological limitations.

Tata Semiconductor Assembly and Test Pvt Ltd (TSAT)

TSAT is setting up a $3.21 billion semiconductor unit in Morigaon, Assam, focused on advanced packaging technologies like flip chip and ISIP. With a capacity of 48 million units per day, the facility will serve industries such as automotive, EVs, and consumer electronics.

Tata Electronics signed an MoU with Tokyo Electron (TEL) on September 9, 2024, for the procurement of equipment for its semiconductor facilities in Gujarat and Assam. The partnership includes workforce training and R&D initiatives.

CG Power & Industrial Solutions, part of the Murugappa Group, has partnered with Renesas Electronics America Inc. and Stars Microelectronics to establish an OSAT facility in Sanand, Gujarat. With a $791 million investment, this joint venture will focus on packaging chips for consumer, industrial, automotive, and power applications.

In September 2024, Kaynes Semicon received approval to set up an OSAT/ATMP semiconductor unit in Sanand, Gujarat, with an investment of $394.15 million. This unit, under the India Semiconductor Mission, will produce 6 million chips daily for automotive, EVs, and other industries. The company is also collaborating with IIT Bombay to establish an R&D center for package research.

India’s semiconductor industry is gaining momentum through strong government initiatives and private sector collaborations. With a focus on developing local manufacturing and design capabilities, India is on track to become a key player in the global semiconductor ecosystem. This growth will support critical industries like automotive, EVs, telecom, and consumer electronics, further positioning India as a vital contributor to the global semiconductor supply chain.

Explore India's rapidly growing semiconductor industry, driven by government initiatives, private sector partnerships, and a focus on innovation and self-reliance. Learn about the key developments, investments, and future potential of India as a global semiconductor hub.

India's Semiconductor Industry: Emerging Global Hub for Innovation and Manufacturing

India's Semiconductor Revolution: Paving the Way to Global Leadership

The Rise of Lithium-Ion Batteries: Powering the EV Revolution

Lithium-ion (Li-ion) batteries have become the core of vehicle electrification, thanks to their advanced electrochemical properties. These rechargeable batteries rely on the reversible movement of lithium ions to store and release energy. Over the past decade, they have fueled the rapid growth of electric vehicles (EVs), cementing their role in the green energy ecosystem.

However, the surging demand for EVs has created massive pressure on the global battery supply chain. As the EV market continues to expand, the need to diversify into newer, more sustainable battery technologies becomes critical, with sodium-ion batteries emerging as a strong alternative to complement or replace lithium-ion in the future.

The Roadblocks: India's Challenges in Battery Production

India faces a major obstacle in its efforts to develop a robust battery production ecosystem—an insufficient supply of essential raw materials such as nickel, cobalt, and lithium. These are critical for manufacturing EV batteries, yet India's reserves are limited. Significant exploration efforts, which could span several years, are required before these resources can be tapped for commercial use.

China's Dominance in the Lithium and EV Battery Market

China has firmly established itself as a global leader in the EV battery industry, with manufacturers like CATL, BYD, CALB, Gotion High-Tech, Sunwoda, and Farasis collectively holding 60.4% of the market in 2022, up from 48.2% in 2021. Chinese companies have secured direct access to key raw materials by acquiring mines in resource-rich countries, enabling them to dominate the supply chain for lithium, nickel, and cobalt.

Establishing the necessary infrastructure for battery production requires enormous capital investments, from mining operations to the construction of large-scale gigafactories. For instance, China’s Zhejiang Huayou Cobalt invested $422 million in acquiring a lithium mine in Zimbabwe and an additional $300 million in processing facilities. However, it can take years before these facilities become profitable, with the average time from resource discovery to commercial production being 16 years globally.

Specialized Expertise and Long-Term Commitment

Building a successful EV battery supply chain not only demands significant financial investment but also specialized expertise. China has been ahead in this space, focusing on EV technology development since 2001. Indian companies and the government are working to close the gap, but creating a competitive local battery manufacturing ecosystem will require both time and sustained efforts.

India’s Push Towards Energy Independence

Despite the challenges, India is making strides toward energy sustainability and EV adoption. The country aims to electrify 30% of its vehicle fleet by 2030. The domestic EV market is expected to grow at a staggering 49% CAGR, with annual sales projected to hit 10 million by the end of the decade. However, these ambitions hinge on solving the critical issues of high battery costs, raw material shortages, and the absence of domestic cell technology.

Breaking Down the Components: How a Lithium-Ion Battery Works

The anode is one of the two electrodes in the battery. It is typically made of a carbon-based material, such as graphite. During discharging, lithium ions from the anode move toward the cathode through the electrolyte, releasing electrical energy.

The cathode is the other electrode in the battery. It is composed of various materials depending on the type of lithium-ion battery. Common cathode materials include lithium cobalt oxide (LiCoO2), lithium manganese oxide (LiMn204), and lithium iron phosphate (LiFePO4). During discharging, the cathode accepts lithium ions from the anode.

The separator is a porous membrane positioned between the anode and cathode. It is typically made of a polymer material that allows the passage of lithium ions while preventing direct contact between the anode and cathode. This prevents short-circuits and ensures safe operation.

The electrolyte is a lithium salt (e.g., lithium hexafluorophosphate, LiPF6) dissolved in a solvent (typically an organic solvent). The electrolyte conducts lithium ions between the anode and cathode during charge and discharge cycles. It is a critical component that enables ion transport in the battery.

 Thin sheets or foils made of conductive materials (usually aluminum for the cathode and copper for the anode) are used as current collectors. These collect and distribute the electrical current produced or consumed during charging and discharging.

 The casing is the outer shell that houses all the components of the battery. It provides physical protection and helps maintain the structural integrity of the battery. The casing is typically made of metal or plastic and is sealed to prevent leakage.

Electrode Binders and Conductive Additives:

 In the anode and cathode, electrode binders and conductive additives are used to hold the active electrode materials in place and enhance electrical conductivity within the electrodes.

 In modern lithium-ion batteries, safety mechanisms such as pressure relief vents are included to release excess pressure in case of overheating or overcharging, helping prevent thermal runaway and related safety issues.

 The battery has terminal connections, usually on the exterior of the casing, that allow for the connection of wires or connectors to the external circuit.

 To prevent electrical contact between the various components, insulating materials are used within the battery to ensure that only the desired electrical pathways are active.

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Here's a comparison of lithium batteries with other common battery types in a table format:

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This table highlights the key differences and considerations for choosing between lithium batteries and other common battery types.

Battery Production: Key Steps in the Manufacturing Process

The manufacturing of lithium-ion cells involves a multi-step process, from preparing the electrodes to packaging the final cells. Key stages include:

 – Coating metal foils with active materials like lithium metal oxide and graphite.

 – Applying the slurry to foils and drying them.

 – Shaping and arranging the electrodes with separators.

 – Placing electrodes into the cell casing and sealing it.

 – Running initial charge cycles to form the SEI layer and conducting safety tests.

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India’s Lithium Discoveries: A Boost for the EV Sector

India's discovery of lithium reserves in Jammu and Kashmir, along with Degana, Rajasthan, offers a game-changing opportunity to meet 80% of its domestic demand. This reduces reliance on China and can significantly lower EV production costs, making electric vehicles more affordable. By harnessing these reserves, India aims to establish a strong domestic lithium supply chain, reduce import dependence, and drive sustainable growth in its EV industry.    


India's Lithium-Ion Battery Market Growth 

India's lithium-ion battery market is projected to reach nearly $150 billion by 2030. The industry is expected to grow from 2.9 gigawatt hours (GWh) in 2018 to approximately 132 GWh by 2030, with a robust CAGR of 35.5%.                                                 

The Backbone of Vehicle Electrification: India's Lithium-Ion  Battery Revolution

The Cabinet approves PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme with an outlay of Rs.10,900 crore over a period of two years

The Union Cabinet, led by Prime Minister Shri Narendra Modi, has approved the 'PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE)' Scheme, with a budget of ₹10,900 crore over two years. This initiative by the Ministry of Heavy Industries (MHI) aims to accelerate electric vehicle (EV) adoption and promote green mobility across India.

The scheme introduces e-vouchers to streamline the EV purchasing process, offering ₹3,679 crore in incentives for e-2Ws, e-3Ws, e-buses, and e-ambulances. A total of 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses will be supported. E-vouchers will be authenticated via Aadhaar and issued to buyers at the point of purchase, simplifying the incentive claiming process.

Notably, the scheme allocates ₹500 crore for electric ambulances, integrating EVs into the healthcare sector, and ₹500 crore to incentivize electric trucks, with additional benefits for scrapping older vehicles under the MoRTH scrapping guidelines. Public transport is also a priority, with ₹4,391 crore set aside for the procurement of 14,028 e-buses in major cities like Delhi, Mumbai, Kolkata, and others.

To address range anxiety, the scheme allocates ₹2,000 crore for the installation of 22,100 fast chargers for e-4Ws, 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-2Ws/3Ws in high EV penetration areas and along key highways. Moreover, ₹780 crore is dedicated to upgrading MHI’s vehicle testing agencies for modern EV technology assessments.

The scheme also supports Aatmanirbhar Bharat through a phased manufacturing program (PMP), encouraging domestic EV production and strengthening the supply chain. The initiative will generate employment across manufacturing, infrastructure, and testing, creating a competitive and resilient EV sector. Overall, the PM E-DRIVE Scheme is set to reduce pollution, enhance green mobility, and contribute to sustainable transportation in India.

The Cabinet approves Rs 10,900 cr PM E-DRIVE scheme to push electric mobility

India's Plastic Pollution Crisis: A Looming Environmental Threat

India has overtaken China as the world’s largest plastic polluter, generating a staggering 9.3 million tonnes of waste annually. The main issue with plastic waste in India isn't the volume produced, but the inefficiency in waste management, including improper collection and recycling. The current priority is on improving the collection, management, and disposal of plastic waste. Over the past two decades, increased demand for new products and technologies has led to higher plastic consumption. India’s waste management infrastructure has struggled to keep up, with only 60% of plastic waste recycled, while the rest is dumped into landfills or burned openly, releasing harmful toxins into the air.

India's plastic recycling rate was 8% in 2019, with a daily waste generation of 26,000 tonnes, and its recycling capacity remains inadequate. Plastic consumption is projected to reach 70.5 million tonnes by 2035, with a target of recycling 67% of that. However, challenges such as single-use plastics, which make up 43% of total plastic waste, and improper waste management persist, emphasizing the urgent need for stricter regulations and public awareness campaigns.

Major Cities Contributing to India’s Plastic Waste Surge

India’s major cities, including Delhi, Mumbai, Kolkata, and Bengaluru, are among the top contributors to the country’s plastic waste problem. Daily plastic waste generation stands at 26,000 tonnes, with single-use plastics accounting for 43% of the total. These cities face critical waste management challenges, as dumping sites vastly outnumber sanitary landfills. Dumping sites across the country face uncontrolled waste disposal, outnumbering sanitary landfills by a ratio of 10 to 1. With a per capita waste generation rate of 0.12 kg per day, approximately 5.8 million tonnes of plastic waste are openly burned annually in India.

The Environmental and Human Toll of Plastic Pollution

Plastic pollution has far-reaching impacts on both the environment and human health. Rivers such as the Ganga and Yamuna are major carriers of plastic to the ocean, contributing to marine pollution. Wildlife is severely affected, as animals ingest or become entangled in plastic, disrupting ecosystems. The burning of plastic also releases toxic chemicals, causing respiratory issues and food contamination.

Challenges in Combating Plastic Pollution: Can India Keep Up?

India faces numerous challenges in managing plastic waste, from inadequate recycling infrastructure to weak enforcement of regulations. Multilayer packaging, which is difficult to recycle, and the continued prevalence of single-use plastics exacerbate the problem. Additionally, public awareness and participation in waste management are low, especially in rural areas.

Path Forward: Turning Plastic Waste into Opportunity

The Indian plastic waste management market is projected to grow to 23.7 million tons by 2032. This is a compound annual growth rate (CAGR) of 9.86% from 2024 to 2032 driven by increased recycling capacity, stricter government regulations, and rising consumer awareness. Promoting alternatives to plastic, expanding waste-to-energy technologies, and encouraging public participation are essential to addressing the plastic waste crisis. By strengthening Extended Producer Responsibility (EPR) mechanisms and focusing on microplastic research, India can tackle this issue and work towards a sustainable future.

waste management

India's Growing Plastic Waste Crisis: A Looming Environmental Threat

India’s Waste Woes: Turning Trash into Treasure

India, the 5th largest economy in the world, has seen a steady increase in population, leading to a significant rise in waste generation. The country produces over 62 million tons of waste annually, of which only 43 million tons are collected. Out of the collected waste, 12 million tons are treated before disposal, while the remaining 31 million tons end up in landfills.

Projected Waste Generation and Market Growth

As India continues to experience rapid urbanization, industrialization, and economic growth, waste generation is projected to soar to 165 million tons by 2030. The Indian waste management market is expected to grow from $12.90 billion in 2024 to $17.30 billion by 2029, with a compound annual growth rate (CAGR) of 6.10%. Despite this growth, only 30% of the 75% recyclable waste is currently being recycled, underscoring the need for improvement in waste management practices.

The vast amount of waste generated in India presents environmental and health challenges, but effective waste reduction and recycling strategies can turn these issues into opportunities for a more sustainable future. India’s waste management industry, though relatively new, has rapidly expanded with a focus on enhancing the collection and disposal of waste from households and industries. As regulatory frameworks evolve and industrial growth continues, the sector is poised for further expansion, playing a crucial role in sustainable development through environmentally responsible practices.

Government Initiatives Driving Waste Management

India has made substantial progress in waste reduction and recycling efforts, driven by various government initiatives and policies promoting sustainable practices. The Swachh Bharat Abhiyan (Clean India Mission) focuses on nationwide cleanliness and effective waste management. The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) aims to enhance waste management infrastructure in urban areas. Moreover, the Extended Producer Responsibility (EPR) framework holds manufacturers accountable for the entire life cycle of their products, including proper disposal.

Here are some of the leading players in the formal recycling industry:

India's waste management sector must prioritize better waste segregation at the source, expanded recycling infrastructure, and public awareness to increase participation in sustainable practices. Strengthening regulatory frameworks like EPR, promoting waste-to-energy projects, and leveraging public-private partnerships (PPP) are key to addressing the rising waste generation. Encouraging technological innovation, sustainable urban planning, and supporting startups in the waste management space will further enhance efficiency, reduce environmental impacts, and unlock economic growth opportunities. Integrating these strategies will help India turn its waste challenges into opportunities for a sustainable future.

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