Mumbai: Four of India’s top conglomerates have cumulatively invested more than ₹4,000 crore in semiconductor projects over the past two financial years, with three tapping government incentives as they bet on rising domestic demand for processors, memory chips, storage and other silicon products.
Starting January 2025, Tata Electronics, Murugappa Group’s CG Power and HCL Group have announced semiconductor projects worth ₹1.29 trillion under the India Semiconductor Mission, which aims to strengthen domestic chipmaking capabilities. Since then, these companies have invested ₹3,345 crore in as many semiconductor manufacturing and assembly plants in India. Including L&T’s’ ₹812 crore investment in chip design, the total rises to ₹4,157 crore.
These investments reflect growing interest among India’s oldest industrial groups in venturing into frontier technologies, while industry stakeholders said the investments made so far mark a promising start.
“Conglomerates acting as anchor investors bring credibility to the industry and demonstrate investment appetite,” said Ashok Chandak, president of industry body India Electronics and Semiconductor Association. Chandak said these early investments are an “important breakthrough” as they could help “create a broader ecosystem for companies across the semiconductor value chain.”
The government has earmarked more than ₹2 trillion in total outlay under two semiconductor incentive schemes— ₹76,000 crore under Semicon 1.0, launched in 2021, and ₹1.27 trillion under Semicon 2.0, approved in July 2026.
Filings made with the ministry of corporate affairs, and accessed by Mint, showed that between FY25 and FY26, Tata Electronics invested ₹2,401 crore over six tranches in two step-down semiconductor subsidiaries—Tata Semiconductor Assembly and Test (TSAT) Private Ltd, and Tata Semiconductor Manufacturing (TSM) Private Ltd.
In February 2025, the Centre approved two Tata Electronics projects—a semiconductor fabrication plant, or ‘fab’, in Dholera, Gujarat, and an outsourced semiconductor assembly and testing (OSAT) plant in Jagiroad, Assam—with a combined project cost of ₹1.18 trillion.
At the same time, Chennai-based Murugappa Group’s electricals division, CG Power and Industrial Solutions Ltd, has invested ₹820 crore in CG Semi–a joint venture (JV) between CG Power, Japan’s chip design firm Renesas and Thailand’s OSAT operator Stars Microelectronics. CG Semi’s OSAT in Sanand, Gujarat, was approved under the semiconductor mission in March 2024. On 4 July, the company announced that it has started commercial chip supplies from its facility.
A year later, in May 2025, the HCL Group received approval to set up a ₹3,700-crore semiconductor plant in Jewar, Uttar Pradesh, through India Chip, a 60:40 JV with Taiwanese electronics manufacturer Foxconn. On 15 April, the group invested ₹124 crore in India Chip to begin construction of the project.
With central and state subsidies accounting for at least 70% of the announced project costs, the amount invested so far represents only a fraction of the ₹1.29 trillion in total multi-year investments committed by , HCL Group and CG Power.
Larsen & Toubro invested ₹812 crore in its chip design subsidiary—L&T Semiconductor Technologies Limited (LTSCT). On 31 July, Sandeep Kumar, chief executive of LTSCT, told Mint that the company has started generating early-stage revenue. The company has set a target of generating ₹5,000 crore in revenue by FY31.
Notably, LTSCT is not a beneficiary of government incentives under the first phase of the India Semiconductor Mission.
However, Kumar said the company is evaluating the Centre’s new Semicon 2.0 scheme, which aims to bolster India’s domestic semiconductor design and manufacturing ecosystem.
A May 2026 report by Niti Aayog said India imports 95% of its semiconductor requirements. Through the India Semiconductor Mission, which began attracting investments with US memory-chip maker Micron’s project in June 2023, New Delhi is seeking to cut reliance on overseas suppliers and meet the demand for semiconductor products domestically.
Chandak emphasised that both central and state incentives are extremely important for the industry. “Without this support, it would be difficult to attract companies and build a semiconductor ecosystem in India. In advanced semiconductor technologies, India is at a disadvantage compared with established global hubs, making government support particularly crucial as the industry develops.”
To be sure, India’s only chip fab so far has been the state-run Semiconductor Laboratory (SCL) in Mohali, Punjab, which began operations in 1984. However, SCL continues to manufacture chips using older technologies. Tata Electronics’ chip fab in , therefore, will be India’s first commercial fab to manufacture chips using more advanced process technologies—an opportunity the company has also reaffirmed.
In Tata Sons’s FY26 annual report, chairman N. said that the semiconductor industry is among the “most complex manufacturing endeavours humanity has attempted”.
“Chips are the new steel. Every phone, car, aircraft, hospital, power grid, and AI system runs on them. A nation that cannot make its own semiconductors will always depend on others for the most fundamental input of the modern economy,” Chandrasekaran said.
At the heart of this opportunity is rising chip consumption in the country. India’s semiconductor consumption has grown at an estimated 18-20% CAGR over the past eight years, with the market size rising from about $15 billion in 2018 to an estimated $62 billion in 2026, analysts at Equirus Securities said in a July note. The market is expected to swell to $155 billion by 2031, taking India’s share of global semiconductor consumption to about 9%, the note added.
Shrish Pant, director analyst at Gartner, said that since capital-intensive projects usually face hurdles domestically, the current investments are moving at a good pace. “Good is not great; and great is what you need to compete at a global level, and the Indian semiconductor ecosystem must draw lessons from the fierce competitive nature of the global ecosystem to scale and sustain.”