Why India’s Deep-Tech Moment Matters to the Global Chip Industry

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The world is in the middle of a profound technology realignment.

Semiconductors, advanced computing, space systems, quantum technologies, robotics, biotech, and climate tech are no longer just fast-growing markets; they have become strategic infrastructure. Nations are rewriting industrial policy around them. Supply chains are being re-architected. Talent is flowing toward harder, more fundamental problems.

In that context, India is on the threshold of a strategic rise in deep-tech industries. However, this shift, beyond India’s own national ambition, is an opportunity for the global electronics and semiconductor industry to diversify, de-risk, and accelerate innovation.

From IT services to deep tech: a structural shift

In past decades, India was known for its software services and IT outsourcing. That model created enormous value, but the country did not play at the leading edge of hardware and deep science. Today, several long-term trends are converging to change this:

• Policy momentum. India’s government has launched bold new investments to bolster strategic technologies such as semiconductors, quantum, and advanced communications. These include initiatives such as the $12 billion Research & Development Innovation (RDI) Scheme and the India Semiconductor Mission, designed to engage entrepreneurs and investors in building new Indian-domiciled startups. These initiatives aim to build domestic capability across the technology life cycle, from fundamental research to commercialization.
• Talent at scale. India already contributes a significant share of the world’s chip design and embedded systems talent, often working at the global capability centers of leading technology firms. That expertise is expected to be increasingly channeled into homegrown product companies.
• A new founder archetype. We are seeing more teams that combine deep scientific or engineering backgrounds with global product and business experience—entrepreneurs and leaders who have designed accelerators, architected cloud systems, or managed fabs and now want to build their own companies in India.

This is a seismic shift—to designing and owning the core IP, especially in compute, connectivity, and systems that sit at the heart of electronics.

Semiconductors and technological sovereignty

The last few years have made clear that semiconductors are not a niche industry but the substrate of modern life. When supply chains snarled, automakers idled plants, industrial systems slipped, and products from smartphones to base stations became harder to ship.

For countries, that experience sharpened the question: How much technology sovereignty is needed in semiconductors and adjacent deep-tech sectors?

Absolute self-sufficiency is unrealistic and economically inefficient. But complete dependence on a narrow set of geographies is risky. The answer lies in a distributed model, where capabilities and supply chains are regionally diversified to remove single points of failure.

Here, India can play an important role:

• As a cost-effective design powerhouse for a range of products, including complex SoCs, AI accelerators, RF and mixed-signal components, and power electronics
• As a system-level innovation hub, especially where hardware, AI, and connectivity converge around edge computing, industrial automation, electric mobility, and next-gen networking
• Over time, as a manufacturing and advanced-packaging node, particularly for specialty and trailing-edge components and systems that are critical for automotive, power, and industrial markets

Thus, we will see the emergence of new product companies and platforms that can serve global markets while strengthening overall supply chain resilience.

The missing ingredient: patient, smart capital

India’s emerging founders have no shortage of ambition or capability. What has been lacking, historically, is patient private capital with sector expertise, willing to back deep-tech ventures through scaling that can include long R&D cycles and complex productization.

Deep-tech companies do not fit neatly into a quick-turn venture model. Their roadmaps are often measured in years, not quarters, navigating long qualification cycles with customers. They are often more exposed to geopolitical risk, export controls, and standards battles. Their success has dependencies on access to global supply chains, foundries, and strategic customers, not just local markets.

This is why a group of global and Indian investors recently came together to launch the India Deep Tech Alliance, a private sector coalition focused on mobilizing meaningful capital and operating expertise around a shared goal: to help catalyze a new generation of Indian deep-tech startups that serve global markets. The Alliance’s capital commitments have already reached nearly $2 billion, with more to follow.

But capital alone will not create global leaders. Deep-tech founders require much broader ecosystem support, which is why the Alliance aims to pair capital with mentorship, supply chain access, and market entry pathways as well. Members including investors and leading global technology companies such as Nvidia and Qualcomm bring relationships across the semiconductor stack, from design tools to manufacturing, as well as board-level experience with companies that have scaled globally.

Public–private partnership done right

Government has a critical role in catalyzing this transition alongside the private sector, but we know from experience that this is most effective when the focus is on creating tailwinds, not crutches.

Public investment should concentrate on enabling infrastructure—for example, research labs, training programs, and incentives that de-risk private investment in fabs—rather than trying to pick commercial winners. Openness to global collaboration through partnerships with universities, research institutes, and companies can accelerate capability building in critical areas. Stable fiscal policies and a reliable business environment matter a great deal as well.

Encouragingly, we have seen movement along these lines: bold outlays such as the RDI scheme, new initiatives to deepen technology cooperation between India and major tech economies including the U.S., and a more explicit recognition that deep tech is central to economic and national security.

But policy alone cannot build companies. That is where investors, industry leaders, and founders must step up together in kind.

A call to the global electronics community

For engineers, product leaders, and executives in the semiconductor and electronics industry: what does all this mean?

• Engineers and researchers: India presents a new base to tackle ambitious global problems at scale, from energy-efficient computing to secure connectivity to specialized accelerators. The ecosystem is increasingly ready to support you.
• Investors: The potential to build enduring, globally relevant companies within India, especially in semiconductors and adjacent sectors, is enormous and can be backed with policy and risk-mitigating financial support from government programs.
• Global semiconductor and electronics leaders: India will be a source of more innovation from Indian product startups and a locus for co-creation with local deep-tech companies.

Deep tech is the next frontier of global innovation. India has a chance to help lead that frontier, not in isolation but as a vital, connected node in the world’s semiconductor and electronics ecosystem. If done right, this evolution can not only diversify global supply chains but also develop broad-based opportunity between India and other leading economies and power a new generation of global technology leaders. Venture capital firms and leading technology corporations are seeing and acting on this opportunity.

—Arun Kumar is managing partner at Celesta Capital and inaugural chair of the India Deep Tech Alliance. He previously served as CEO of KPMG India as well as in U.S. President Obama’s administration as Assistant Secretary of Commerce for Global Markets and Director General of the U.S. & Foreign Commercial Service. Over his career, he has worked with founders and executives across the semiconductor, enterprise technology, and industrial sectors to scale innovation-driven companies worldwide.