I proposed a "Do-it-in-house" theory

India is bringing the "global" semiconductors supply chain to go "national". A pattern repeating itself.

ChatGPT just called me an undisciplined writer.
Which is funny, because it’s probably just jealous I’m not asking it to structure my thoughts before I even have them.

Anyway.

There’s this big, uncomfortable question a chaotic 20-year-old like me keeps circling:
what is India’s stance with the world, actually?

Disclaimer: I’m an immature writer & at the same time, I am not toning my stupid thoughts down. This might read more like a personal journal entry (talking somewhat about geopolitics & chips)

Yes, so coming back to India

AI generated (Modi’s looking more like a DJ)

There’s a saying (very cliché, still true): a friend to everyone is a friend to no one. Sure. But in a world where alliances keep breaking up publicly and then sanctioning each other, India choosing the middle path feels less naïve and more… smart. Very Buddha-coded.

Whether it’s balancing QUAD and BRICS, keeping pace with China (we’re at least aligned on one thing: dollar dependence is uncomfortable), or running parallel diplomacy with the US, India is playing all sides. We’ve been importing roughly a third of our crude from Russia, talking security and tech with Washington, and nudging local-currency trade inside BRICS. India is basically friends with everyone, except Pakistan (lol).

At the recent BRICS summit, we kind of ragebaited the US, not intentionally, diplomatically speaking. We proposed the digital currency for trade with the Global South, sidelining the dollar. India settling some oil trade in rupees (especially with Russia) and promoting local-currency settlements with partners like the UAE isn’t ideological. It’s practical.

At the same time, External Affairs Minister Jaishankar made it clear that India values the stability the dollar provides and has no interest in undermining it.

What’s happening here feels bigger. The Global South is increasingly on the same page about dollar dominance, not to replace it, but to reduce exposure to it. This isn’t about creating the next reserve currency. It’s about bilateral trade independence, small exits from a system that’s become volatile, politicised, and easy to weaponise.

All of this is also quietly pushing countries toward non-US-interference supply chains, starting with critical goods. Because any US mood swing can turn into a sanction, tariff, ban, or threat overnight. So the goal now is obvious: independent, in-house, stable supply chains- fewer choke points, fewer lectures.

That’s where the India–EU FTA matters. After dragging on since 2007, it finally locked in. Between US–China rage wars, India seems to have found something rare: a relatively stable partner in Europe.

This deal opens up a serious market for labour-intensive exports like textiles and chemicals, and potentially chips too, if India manages to scale manufacturing. Even the possibility matters.

And then there’s ASML. Europe-based, controls some of the most critical photolithography tools in the world, basically the bottleneck of modern chipmaking. India engaging with ASML, even at early or limited levels, paired with an EU FTA, is kind of a cherry on top. It doesn’t magically solve semiconductors, but it does signal access, intent, and long-term alignment.

Put together, this isn’t about cutting the US out. It’s about not being held hostage. Fewer single points of failure. More optionality. Less exposure to sanctions as a policy.

Now, what I actually wanted to throw light on was the Indian intent to get the whole semiconductor supply chain in-house.

The“Do It In-House theory”

(God, I am finding theories nowadays. Something’s prolly unusually unusual)

Here is a pattern I have started noticing (only today), and it is making sense to me:

1. A product starts as a global collaboration
   Every country contributes something like raw materials, tools, design, or assembly

2. The product becomes critical
   Once it is indispensable for power, security, technology, or health countries realize they cannot depend on the world. Mood swings, tariffs, sanctions, or political interference are just too risky

3. The country gradually internalizes the supply chain
   The goal is full in-house control, avoid reliance on anyone else, survive if the world decides to pull the plug

This pattern shows up again and again

• Nuclear weapons (US)
  Scientists innovated in Germany, the UK, and the US but once it became critical the US captured the entire supply chain under state control

• Space Technology (India)
  ISRO learned from the world, combined it with domestic brilliance, and captured the supply chain in-house. SLV-3 launched the Rohini satellite in 1980 and India had full end-to-end launch capability

• Pharma (India)
  India built a domestic pharma supply chain critical for the largest population in the world many relying on free or subsidized medicine. Relying on global suppliers would have been catastrophic

And now semiconductors

• Chips were invented by the world. Every country carved a niche

  - Lithography tools Europe
  - Raw materials mostly China
  - Design and innovation West
  - Foundries Taiwan
  - Assembly and packaging South Asia
  - Electronics Japan, China

• But chips are critical. Everything from AI to defense to consumer gadgets depends on them. So naturally countries are racing to bring production under control.
  - US with the CHIPS Act & incentivizing producers to relocate manufacturing back to US (covered it in a recent blog)
  - India planning end-to-end fabs and local supply chains
  - Europe controlling critical equipment like ASML

The pattern is clear. Critical plus global leads to risk which leads to in-house control. History repeats itself. Space pharma & now semiconductors.

Semiconductors: the next target of India to go in‑house

Here’s how India’s semiconductor story actually stands today:

• The real push began with the India Semiconductor Mission (ISM), a government initiative to build a domestic semiconductor ecosystem covering design, manufacturing, packaging, and more.

• Government support includes large fiscal incentives for fabs, packaging units, and design houses, up to 50% support on approved projects on a pari‑passu basis.

• This effort is backed by multiple projects approved under ISM, signaling progress in building local capacity.

Design: India’s strongest spot

• India has a huge pool of semiconductor design engineers, and for years Indian teams have worked on chip architecture, verification, and system design for global companies. (I’ve talked about this in a previous blog)

• International companies like Intel, Apple, Qualcomm, AMD, MediaTek and others already run large design and R&D centres here, showing where India is already competitive.

Assembly and packaging: quiet but important

• India has a growing presence in assembly, testing, and packaging (ATMP/OSAT): the stage where chips are prepared after manufacturing.

• This work used to be seen as lower‑end, but now packaging and testing increasingly affect performance and reliability, making it more strategic.

Fabrication: starting from scratch

• Historically, India had almost no commercial semiconductor fabs producing chips at scale. Most chips were imported across the board.

• Instead of jumping straight to ultra‑cutting‑edge nodes, India is beginning with mature technology nodes (roughly 28nm to 110nm), which are cheaper and still crucial for automotive, industrial, and consumer electronics. The focus is on key chip categories such as compute, RF, networking, power, sensor and memory chips, with targets of high domestic design share.

• This is sensible because logic chips & analog chips at the smallest nodes are the hardest and most expensive to make, even though China hasn’t fully dominated that space.
  
  We are arranging the required synergies gradually to make the Indian Semiconductor Industry dream come true.
  

  One concern still lingers: what if we go the China way, trying to do everything at once, only to run into feuds with the US and export controls on critical tech?
  

  China still cannot manufacture the most advanced logic chips domestically. That is not even our immediate target, but it matters because it exposes the gap between ambition and reality. AI is happening there. Companies are building models and software, but hardware constraints slow everything down.
  

  For India, the lesson is clear: go step by step, control & focus on what we can, build our supply chain gradually, and avoid relying on a single source. Let’s hope the claims and announcements materialise; patience will do the work.
  
  I’ll explore China, Japan, and more drama in my next blog.
  
  Have a pretty day ahead.
  - Abhishree