India widens its chip bet: from fabs to everything.

On 15 July 2026 India’s Union Cabinet approved Semicon 2.0, a programme for the country’s semiconductor design and manufacturing ecosystem with an outlay of ₹1,27,500 crore, roughly US$13 billion. The sum is large by the standards of Indian industrial policy and modest against the industry’s capital costs: the one fab now under construction, at Dholera, is planned at around US$11 billion on its own.

The amount is not the point; the architecture is. Phase one, running since 2022, paid companies to build plants. Phase two also pays the companies that supply them — the machines, chemicals, gases and specialty materials without which a plant is an empty building. That is a different kind of policy, and its addressees include suppliers outside India.

The pillar that did not exist in phase one is aimed at precision manufacturers

The Cabinet release sets out six pillars. Design builds on the 105 start-ups already developing chips, aiming to make India “a key semiconductor chip design IP country”. Machines and materials is new: companies engaged in the manufacture and research of the machines, and in the manufacture of the materials, chemicals and gases essential to chipmaking, “will be incentivized”. The rest seek more fabs of every type, the first due for commissioning in 2028; extend support to assembly, testing and packaging; fund research beyond the 28 to 110-nanometre nodes at which the country began; and address talent, 315 universities having trained some 68,000 students in chip design on the latest electronic design automation tools.

The release puts that pillar in plain industrial terms: it will “help in developing the precision manufacturing industry in our country”. Read that way, Semicon 2.0 is less a chip policy than an industrial-base policy using chips as its organising customer: the plant is one line item, and the qualified suppliers behind it carry the recurring value.

Phase one produced enough plants to make the supply question concrete

Under the first phase, twelve manufacturing units were approved with cumulative investment above ₹1.64 lakh crore, about US$17 billion: one silicon fab, one silicon carbide fab, one integrated gallium nitride micro-LED display fab, and nine packaging units. Three companies — Micron, Kaynes and CG Semi — have started commercial production, and a fourth is expected during 2026.

The largest project shows what this means for suppliers. Tata Electronics’ Dholera fab in Gujarat, approved in February 2024 with Taiwan’s Powerchip Semiconductor Manufacturing Corporation at up to ₹91,000 crore for up to 50,000 wafers a month, has European supplier arrangements already. On 2 September 2025 Tata Electronics and Merck signed a memorandum of understanding covering high-purity electronic materials, gas and chemical delivery systems and fab infrastructure; on 16 May 2026, announced from The Hague and Mumbai, Tata Electronics signed another with ASML covering lithography tools for the Dholera ramp, talent development and research infrastructure. Demand under the machines-and-materials pillar is not a forecast but a procurement process under way.

European suppliers are equipping India while the EU’s own 2030 target slips out of reach

Europe’s own position is documented by its auditors. In a 2025 special report the European Court of Auditors concluded that the EU’s target of a 20 per cent share of the global microchip market by 2030 “appears out of reach”; the Commission’s July 2024 forecast puts the EU’s share of the value chain at 11.7 per cent in 2030, against 9.8 per cent in 2022. The Commission manages 5 per cent — €4.5 billion — of the €86 billion in estimated Chips Act funding to 2030, while the world’s leading manufacturers budgeted €405 billion over the three years to 2023. Industry spending is at a high: SEMI expected worldwide 300-millimetre fab equipment investment to pass US$100 billion for the first time in 2025, at US$107 billion, and projects US$374 billion cumulatively from 2026 to 2028.

Capacity is being added where public policy pays for it, and equipment, instruments and materials are where European and Swiss suppliers hold position, wherever it lands.

The trade route is open for Switzerland before it is open for the European Union

For Swiss companies the framework changed before the Indian policy did. The Trade and Economic Partnership Agreement between the EFTA states and India, signed on 10 March 2024, entered into force on 1 October 2025 and sits in Swiss law as SR 0.632.314.231.

India’s commitments to Switzerland and Liechtenstein are organised into staging categories: elimination on entry into force, phased elimination over five, seven or ten years, and reductions to fixed end rates or to half the base rate. As SECO’s explanatory note records, that base rate is not the basic customs duty alone but the sum of basic duty, the agriculture infrastructure and development cess, the health cess and the social welfare surcharge, so the value at stake is usually larger than the headline duty suggests. From the same date India ceased to receive Swiss preferences under the generalised system of preferences, which changes the paperwork for firms buying from India.

The European position is one step behind: the Commission concluded negotiations with India on 27 January 2026 and expects tariffs to be eliminated or reduced on more than 96 per cent of EU goods exports, saving around €4 billion a year in duties on European products. That agreement is not yet in force. Until it is, Swiss-origin goods enter India on terms competitors in the Union do not have.

That window opens onto a market Swiss industry needs. Swissmem reported first-quarter 2026 exports from the Swiss tech industry up 1.1 per cent at CHF 17 billion, with Asia down 4.5 per cent, the United States down 4.2 per cent and capacity utilisation at 81.6 per cent against a long-run average of 85.6 per cent. Reviewing the third quarter of 2025, it had expected impulses only from India and, modestly, from the EU. Switzerland Global Enterprise called India the one major growth market for the Swiss tech industry in 2025, and singled out two provisions useful to capital-goods suppliers: the EFTA commitment to facilitate US$100 billion of investment in India over fifteen years, and easier temporary stays for technical staff handling installation and maintenance.

What a company can settle before the next quotation goes out

Four things remain within a single firm’s control.

• Establish the tariff line, not the headline. Find the product’s Indian tariff code in the schedule of commitments to Switzerland and Liechtenstein, identify its staging category, and calculate against the full base rate, cess and surcharge included.
• Put proof of origin on a working footing. Authorised-exporter status or a movement certificate is half the task; the Indian importer must also satisfy India’s CAROTAR rules, so agree in advance what origin information travels with the goods.
• Classify before quoting. Vacuum, deposition, metrology and control equipment can fall under Annex 2 of the Goods Control Ordinance, where Article 3(1) imposes a licence requirement irrespective of destination and Article 3(3) extends it to unlisted goods whose listed components are their main elements or exceed a quarter of their value. Applications go through Elic.
• Match the offer to the buyer, and to the route. Nine of the twelve approved units are packaging plants, which buy different machines and consumables from a wafer fab. The second pillar, on the wording of the release, is built around developing precision manufacturing in India, which points to activity located there rather than to imports alone.

The dates that will carry information

Four markers belong in the corporate calendar. SEMICON India 2026 runs from 17 to 19 September 2026 at Yashobhoomi in New Delhi, organised by the India Semiconductor Mission and SEMI with more than 500 exhibitors from over 20 countries; it is the likeliest venue for that pillar’s operating detail, eligibility and application windows included. The Commission’s first intermediate evaluation of the Chips Act is due to the Parliament and the Council by September 2026. India’s first fab is scheduled for commissioning in 2028. The EU–India agreement, concluded in January, has no announced date of entry into force.

The shift is not confined to India. Industrial policy in semiconductors has moved from buying factories to buying value chains, and public money now follows suppliers rather than flagship plants alone. For a European or Swiss maker of instruments, valves, coatings or specialty chemicals, the question is no longer whether India will make chips, but whether its own products appear on the qualification lists being written now.