How India Is Building Its Chip Ambition Abroad

By VirentaNews Staff — May 17, 2026

Amsterdam’s canals shimmered under a pale April sun as the ceremonial doors of the Grand Hotel Krasnapolsky opened to a scene once unimaginable in global tech diplomacy: an Indian industrial titan shaking hands with a Dutch engineering powerhouse over the future of semiconductor manufacturing. Inside, executives from Tata Electronics and ASML stood beside Prime Minister Narendra Modi and Dutch Prime Minister Dick Schoof, the air thick with the quiet hum of ambition. Cameras flashed as documents were signed, but the real story unfolded in the unspoken — a developing nation, long dependent on imported chips, now reaching the threshold of mastering one of the most complex technologies on Earth. This was not merely a business agreement; it was the crystallization of a decade-long dream to anchor India in the silicon backbone of the 21st century.

India Enters the Global Chip Race

The agreement between Tata Electronics and ASML centers on the transfer of advanced semiconductor packaging and process support technologies, a critical step toward establishing India’s first high-volume advanced packaging facility. While ASML will not export its most cutting-edge extreme ultraviolet (EUV) lithography machines under the deal — due to U.S.-led export controls — the collaboration includes support for deep ultraviolet (DUV) systems and technical training for Indian engineers. Based in Hyderabad, Tata’s semiconductor unit aims to begin pilot production by 2026, targeting mature-node chips used in automotive, industrial, and consumer electronics. The partnership marks a strategic pivot for India, which has historically imported nearly all of its semiconductors, spending over $20 billion annually on chip imports. With this deal, India moves closer to self-reliance in electronics manufacturing and positions itself as a potential alternative node in global supply chains increasingly wary of overdependence on East Asia.

The Road to Self-Reliance

India’s semiconductor aspirations have long been hamstrung by infrastructure gaps, a shortage of specialized talent, and the sheer capital intensity of chipmaking. As recently as 2020, the country lacked even a single fabrication plant capable of producing modern integrated circuits. However, the launch of the $10 billion Semiconductor Mission under the Production-Linked Incentive (PLI) scheme marked a turning point. Since then, the government has approved proposals from Tata, Taiwan’s Powerchip, and a joint venture involving CG Power and Israel’s Tower Semiconductor. Yet progress has been slow, with land acquisition, water supply issues, and global export restrictions posing persistent hurdles. The ASML deal is significant not just for the technology transfer, but because it signals confidence from a core vendor in the global semiconductor ecosystem — one that has long supplied equipment to TSMC, Samsung, and Intel. It validates India’s long-term credibility as a semiconductor destination.

The Architects of India’s Tech Turnaround

At the heart of this transformation are figures like N. Chandrasekaran, Chairman of the Tata Group, and Ashish Bharadwaj, CEO of Tata Electronics, who have championed the semiconductor push despite skepticism. Backed by the Indian government’s political will — personified by Modi’s personal engagement in bilateral tech diplomacy — they have navigated complex international regulations and forged partnerships with firms from Japan to the Netherlands. On the Dutch side, ASML CEO Peter Wennink emphasized the strategic importance of engaging with emerging markets while complying with export controls. “India is not just a market of a billion people — it’s a nation building its technological sovereignty,” he stated during the signing ceremony. The convergence of corporate vision and statecraft has turned what was once a speculative venture into a tangible industrial project with global implications.

Implications for Global Supply Chains

The Tata-ASML collaboration has ripple effects far beyond India’s borders. For global tech companies, it offers a potential diversification option amid rising geopolitical tensions and supply chain disruptions. The U.S. and European Union have both expressed interest in supporting India’s semiconductor growth as part of broader de-risking strategies. Meanwhile, domestic stakeholders — from startups in Bengaluru to auto manufacturers in Pune — stand to benefit from reduced lead times and greater supply stability. However, challenges remain: developing a skilled workforce, ensuring consistent power and water supply, and securing access to critical materials. The success of this venture will depend not only on technology transfer but on India’s ability to create an ecosystem where innovation can thrive.

The Bigger Picture

This deal is emblematic of a broader shift in the global tech order — one where technological sovereignty is no longer the privilege of a few advanced economies but an imperative for emerging powers. As artificial intelligence, electric vehicles, and 5G drive demand for chips, control over semiconductor infrastructure has become a cornerstone of national security and economic resilience. India’s entry into this arena, even at the mature-node level, challenges the long-standing concentration of chipmaking in Taiwan, South Korea, and the United States. It also reflects a new era of industrial policy, where governments and corporations co-invest in foundational technologies.

What comes next will test India’s resolve. The pilot facility in Hyderabad must transition smoothly to mass production, and the government must maintain policy consistency and regulatory support. If successful, this initiative could catalyze a domestic semiconductor ecosystem, spawning design houses, materials suppliers, and R&D centers. The road is long, but for the first time, India is no longer just a consumer of the digital revolution — it is striving to become one of its architects.

Source: Al Jazeera