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By Mukesh Kaushik
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India’s semiconductor ambitions have been framed in sweeping terms: strategic autonomy, supply chain resilience and a long-awaited entry into the most critical industry of the digital age. Yet, a report by the Indian Parliamentary Standing Committee on Communications and Information Technology (2025-2026) offers a sobering reality check that highlights a widening gap between ambition and execution.
At the center of the assessment is a telling budgetary shift. According to the committee’s report on the Indian Ministry of Electronics and Information Technology’s Demands for Grants (2026-2027), an allocation of 70 billion rupees (US$745.45 million) for semiconductor and display manufacturing was reduced to 4.3 billion rupees at the revision stage. At first glance, it might appear to reflect fiscal tightening. However, the report makes clear that the reduction stems not from lack of intent, but from the inability to utilize funds in time.
Projects have stalled not in the marketplace, but in the maze of compliance. The committee report said that companies approved under India’s semiconductor incentive framework have struggled to meet stringent preconditions required before funds can be disbursed — including complex legal agreements, regulatory clearances and technical benchmarks. The ministry acknowledged before the committee that chip manufacturing in India remains “nascent and highly complex,” with firms taking “considerable time” to meet stipulated conditions.
India’s semiconductor push is not being held back by capital — it is being slowed by capacity.
That diagnosis becomes sharper when viewed alongside another finding highlighted in the committee’s report: More than 30 billion rupees remain unspent with implementing agencies as of last month. That is despite the introduction of a “just-in-time” funding mechanism designed to prevent idle capital. In theory, funds are released only when needed. In practice, as the committee’s observations suggest, the implementation pipeline itself remains constrained.
For a country positioning itself as a global manufacturing alternative, this raises uncomfortable questions about project readiness, institutional coordination and administrative efficiency.
This is where Taiwan enters the conversation — not merely as a global semiconductor leader, but as a case study in execution.
The success of Taiwan Semiconductor Manufacturing Co did not emerge from subsidies alone. Taiwan’s semiconductor ecosystem is built on decades of policy continuity, regulatory clarity and a deeply integrated industrial base. Crucially, it has mastered what India is grappling with: aligning government incentives with industry timelines.
Taiwan’s approach has been less about headline-grabbing incentives and more about predictable execution. Land acquisition, infrastructure provisioning, environmental clearances and power supply — often the stumbling blocks in emerging economies — are streamlined into a coordinated process. The result is not just efficiency, but trust. Companies know what to expect, and more importantly, when to expect it.
India, by contrast, is still constructing that ecosystem in real time. Its semiconductor policy is ambitious, but its institutional architecture remains under development. The challenge is not merely to attract investment, but to absorb it effectively.
However, there is a strategic opportunity embedded in this moment.
As geopolitical tensions reshape global supply chains, Taiwan is diversifying its manufacturing footprint. While flagship investments have flowed into the US and Japan, there is growing interest in building resilient, multicountry production networks. India, with its market size and policy intent, is a natural candidate — but only if it can address its execution deficit.
For Taipei, deeper engagement with New Delhi is not just commercially viable, but strategically prudent. Collaboration could take multiple forms: joint training programs to build semiconductor talent, partnerships in chip design and packaging, and advisory roles in setting up fabrication ecosystems. Taiwan’s strengths in precision manufacturing and process discipline complement India’s scale and software capabilities.
Yet, such cooperation would depend on one critical factor: credibility.
Investors — whether Taiwanese or otherwise — are less concerned with the size of incentives than with the certainty of delivery. Delays caused by regulatory complexity or contractual bottlenecks can erode confidence far more quickly than any financial shortfall.
India’s policymakers appear aware of this. The Standing Committee report underscores that semiconductor manufacturing requires sustained investment, coordinated execution and timely fulfillment of conditions by participating firms. However, acknowledging complexity is only the first step. Managing it requires institutional agility, faster decisionmaking and a shift from policy announcement to policy execution.
Semiconductor ecosystems are not built through budgets alone. They are built through coordination — between government agencies, between central and state authorities, and between policymakers and industry.
India has taken the first step by committing resources and signaling intent. The next step — and the harder one — is to ensure that these resources translate into operational fabs, functioning supply chains and globally competitive output.
For Taiwan, the world’s most advanced semiconductor hub, this is a moment to engage, guide and partner. For India, it is a moment to learn, adapt and deliver.
The stakes extend beyond economics. In an era where chips underpin everything from artificial intelligence to national security, the ability to manufacture semiconductors is fast becoming a measure of strategic power.
India’s dream is still alive, but as the committee’s findings make clear, turning that dream into reality will require more than money. It will require execution — the one ingredient Taiwan has perfected, and India must now master.
Mukesh Kaushik is deputy editor at Dainik Bhaskar, the largest published daily in India. He is a researcher at National Chengchi University on the Ministry of Foreign Affairs Taiwan Fellowship.
