The 'Chip War' between major powers is both a risk and an opportunity for India. Examine with reference to the India Semiconductor Mission.

The 'Chip War' is the US–China rivalry fought through export controls on chips and chip-making technology. It has made semiconductors a question of techno-security [3]. For India it opens a window to attract supply chains, but it also exposes India's dependence on imports. The India Semiconductor Mission (ISM) is India's attempt to turn this risk into an opportunity.

Opportunities for India

• Supply-chain diversification: Firms want trusted locations outside China. By December 2025, 10 ISM projects worth ₹1.60 lakh crore had been approved across six states [1].
• Design strength: The Design Linked Incentive (DLI) Scheme has supported 24 projects, which have produced 16 tape-outs and six fabricated chips [2].
• Technology partnerships: Germany's participation in the Semiconductor Summit 2026 in Chennai shows partners want to work with India's chip ecosystem [3].
• Strategic autonomy: Making chips at home for defence and critical electronics protects India against politically driven supply cut-offs [3].

Risks for India

• Upstream dependence: India relies heavily on imported equipment and materials, and export controls can block these. ISM 2.0's own focus on these segments shows how wide the gap is [1].
• Caught between blocs: If India aligns with one side's controls, it may lose market access or face retaliation as US–China tensions grow [3].
• Subsidy race: Major powers spend heavily on chip subsidies. India's ISM 1.0 alone had an outlay of ₹76,000 crore [1], so delays in getting plants running put a large amount of public money at risk.
• Talent and infrastructure gaps: Running a fab needs process engineers, cleanroom technicians, ultrapure water and stable power, and all of these are scarce. The summit's focus on a skilled workforce reflects this [3].

ISM 2.0: tilting the balance

• ISM 2.0 was announced in Union Budget 2026–27. It targets equipment, materials, full-stack Indian IP and resilient supply chains, with ₹1,000 crore for FY 2026–27 [1]. The direction is right, but the first-year amount is small compared with what has gone to the plants.
• Next steps: provide more scale-up capital for DLI startups, have states commit water and power before plants are built, and link skill programmes to the plants that have already been approved.

ISM has put India in a position to gain from the Chip War. Whether it does depends on moving from assembly-led incentives to ecosystem depth across design, equipment, materials and talent. A calibrated, multi-aligned approach backed by a sustained ISM 2.0 can make India a trusted node in global value chains, in line with Atmanirbhar Bharat and SDG 9 (industry, innovation and infrastructure).