Blitz India Business
NEW DELHI: Every country that has industrialised successfully has faced the same transition, and almost all of them found it harder than the first step. Assembling a product is comparatively easy: it requires labour, land, power and a customer. Capturing the value inside that product — the components, the design, the materials, the intellectual property — is where the durable margin lives, and it takes a decade of deliberate work. India is now at exactly that junction, and its policy architecture shows it.
The evidence is in what the state has chosen to fund. Semiconductor Mission 2.0 carries an outlay of about ₹1.27 lakh crore, and its second phase deliberately widens the target from fabrication plants to design, advanced packaging, materials, equipment and supply chains — the components of value capture rather than assembly. Twelve semiconductor projects have been approved with cumulative investment above ₹1.60 lakh crore, of which three are already in commercial production. In renewables, domestic cell and module manufacturing under production-linked incentives serves the same logic applied to a different industry.
Where the margin sits: Semiconductor Mission 2.0 — outlay ~₹1.27 lakh crore — extends beyond fabrication to design, packaging, materials and equipment, the parts of the chain that hold value rather than pass it through.
A country that assembles a device earns a fee. A country that makes what is inside it earns a margin — and margins are what build the next factory.
The Long View
• The transition: from assembly volume to component and design value capture
• The instrument: Semiconductor Mission 2.0, ~₹1.27 lakh crore; 12 projects, 3 in production
• The parallel: domestic cell and module manufacturing in the energy supply chain
• The constraint: engineering talent depth, supplier ecosystems, logistics cost, policy predictability
An honest analysis has to name the constraints, because they are not trivial. Deep manufacturing requires a supplier ecosystem that cannot be created by a single anchor investment — the precision toolmakers, materials specialists and testing labs that surround a fab take a decade to mature. It requires engineering talent at a depth that the education system is only beginning to supply, which is why examination and skilling reform is an industrial policy question as much as an educational one. It requires logistics costs that do not erode the labour-cost advantage between the factory gate and the port. And it requires policy predictability over horizons longer than any electoral cycle, because a plant of this kind is a fifteen-year commitment.
The constructive path is visible and is being walked. Anchor the supply chain by tying incentives to domestic value addition rather than output alone. Build the talent pipeline through university-industry partnerships and apprenticeships that produce technicians as well as graduates. Reduce logistics cost through the dedicated freight and port capacity now coming on stream. And keep policy stable enough that an investor with a fifteen-year payback can plan around it. Three semiconductor plants in commercial production is a real milestone rather than a promise. The measure of the next decade is whether the hundred suppliers around them become Indian too — because that, not the fab, is where a manufacturing economy is actually built.