Technological Sovereignty in India A Gap Analysis of the Semiconductor and AI Mission

Abstract

India stands at a critical juncture in its technological history. India aims to transition from being a "Global Back Office" for Information Technology services like Knowledge Process Outsourcing (KPO) and Business Process Outsourcing (BPO) to a "Global Powerhouse" for Artificial Intelligence (AI) and Semiconductor Manufacturing. This vision is supported by mainly two massive government initiatives: the India AI Mission (₹10,372 Crore) and the India Semiconductor Mission (ISM) (₹76,000 Crore). However, a deep strategic disconnect exists between these two goals. The AI Mission of India demands cutting-edge 3nm and 5nm chips as soon as possible for training various Artificial Intelligence models. But the domestic semiconductor manufacturing focuses primarily on manufacturing of 28nm nodes. This paper conducts a "Gap Analysis" of this mismatch. The study primarily uses data publicly available from 2024-2025. It includes Tata Electronics in collaboration with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), Dholera project, Micron’s Sanand facility and the procurement of 38,000 Graphics Processing Units. The study compares India to Vietnam. India is growing rapidly in assembling electronics. However, making the powerful chips needed for AI is much harder. To succeed, India needs a new plan. The focus must shift to designing technology, not just building it.