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India's semiconductor strategy is entering a decisive new phase as the country responds to global supply chain disruptions and intensifies efforts to build domestic chip manufacturing, according to Konark Bhandari, Fellow at the Carnegie Endowment for International Peace, India.
Speaking on the sidelines of the Carnegie Global Technology Summit Innovation Dialogue 2025, Bhandari noted that China's export restrictions on gallium, germanium, and rare earth magnets have triggered supply uncertainty for chipmakers. In response, India has launched the National Critical Minerals Mission and a new Production Linked Incentive (PLI) scheme worth Rs 7,280 crore for rare earth magnets. "By launching initiatives such as the National Critical Minerals Mission and a new production-linked incentive (PLI) scheme for rare earth magnets worth Rs 7280, India has aimed to boost domestic manufacturing and mineral extraction," he said. Bhandari also commented on the evolution of the India Semiconductor Mission (ISM). "The first phase, ISM 1.0, launched in 2021 with an outlay of Rs 76,000 crore, has been fully allocated, enabling major investments from companies such as Micron and Tata. "Semiconductor supply chains are vast and complex. Attracting one anchor firm is not enough, you need their entire supplier ecosystem," he explained. "The forthcoming ISM 2.0 is expected to expand incentives to include gases, chemicals, materials, and other supplier segments, though the policy has yet to be released," he shared. India is positioned to pursue a unique developmental model for Artificial Intelligence (AI) that differs from the commercial approaches of the United States and the state-driven model of China, he said. Bhandari emphasised that India's priority will be ensuring access to AI compute for low-income households and resource-constrained enterprises. "One is the US model, which is a commercial model, and then there is a state-led model in China. The Indian model is going to be more about providing low-income people access to AI computer resources. So it's going to be a very human development model in India, which we will pursue at the AI Impact Summit," Bhandari said. "India's role in the upcoming AI Impact Summit 2026 is going to be interesting." However, concerns around data governance remain. Bhandari suggested that while privacy may be less contentious domestically, the international use of Indian user data to train foreign AI models is likely to become a major policy debate. "One of the issues which is being looked at both in India and also outside is that will the data from Indian individuals be used to train foundation AI models overseas. This is something we'll have to wait and watch," he added. Carnegie India is hosting the Global Technology Summit Innovation Dialogue in New Delhi as an official pre-summit event for the upcoming AI Impact Summit 2026, scheduled to be held in New Delhi from February 15 to 20, 2026. (ANI)
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