Deep‑tech commercialisation including semiconductors, defence tech, payments and spectrum as strategic assets

India’s strategic push into deep-technology sectors continues to gather momentum in 2024, solidifying its position as a burgeoning global hub for semiconductors, defense innovation, digital finance, spectrum management, and AI hardware. Recent high-level diplomatic engagements, large-scale infrastructure initiatives, and targeted domestic reforms underscore India’s deliberate efforts to build a resilient, self-reliant, and influential deep-tech ecosystem capable of shaping regional and global standards.

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Rapid Progress in Deep-Tech Commercialisation

India’s comprehensive approach to deep-tech is reflected across several key domains:

• Semiconductors and Manufacturing: Building on the 2025 launch of the National Semiconductor Initiative, India has achieved significant milestones. Collaborations with industry giants such as TSMC, Samsung, and Intel have led to the establishment of state-of-the-art fabrication plants, designed to reduce reliance on imports, strengthen supply chains, and expand export capacity. Recent negotiations aim to attract additional foreign direct investment (FDI), with a focus on technology transfer and joint ventures, to accelerate the establishment of advanced fabs.

• AI Hardware & R&D Ecosystems: The ₹10,000 crore Tamil Nadu Sovereign AI Park has become a cornerstone for AI chip research and commercialization. The ecosystem promotes local supply chain development and positions India as a leader in AI hardware innovation. To bolster this, the government has announced new funding and policy incentives aimed at attracting global AI hardware firms and fostering indigenous chip design capabilities.

• Electronics Manufacturing: The recent inauguration of the HCL–Foxconn joint venture exemplifies India’s rapid scaling of electronics manufacturing. Prime Minister Narendra Modi’s personal involvement underscores the government’s strategic focus on industry collaboration within the Make in India initiative, targeting semiconductors, consumer electronics, and telecom equipment to amplify technological capacity and boost exports.

In defense, modernization efforts are gaining unprecedented momentum:

• Defense Budget & Indigenous Capabilities: The 2026 defense budget, totaling $39.75 billion, emphasizes indigenous radars, Electronic Warfare (EW) systems, and spectrum warfare technologies. India is also advancing 6G research, with dedicated programs to ensure next-generation connectivity and maintain strategic advantages. The focus on spectrum sensing, jamming, and cyber-electromagnetic warfare underscores India’s intent to defend contested electromagnetic domains and project regional power.

• Private Sector Engagement: Companies like Mistral Solutions have secured defense contracts, including a ₹100 crore radar systems order. The increasing participation of private firms signals a paradigm shift towards democratized R&D and manufacturing, supporting self-reliance and strategic autonomy.

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Talent Development, Capital Inflows, and Industry Growth

India’s deep-tech ambitions are underpinned by robust talent cultivation and strategic investments:

• Upskilling and Certifications: Over 100,000 trainees are enrolled in specialized programs for semiconductor design, AI development, and other advanced fields. Among these, 67,000 individuals have received formal certifications, significantly expanding India’s expertise pool. International collaborations, notably with Japan and the US, bolster export-ready talent.

• Manufacturing & Industrial Output: Recent data indicates a surge in manufacturing activity, with sales among goods producers reaching a four-month high, signaling a robust environment for commercial deep-tech products. This growth is driven by policy incentives, domestic demand, and foreign investor confidence.

• Venture Capital & Strategic Funds: Investor confidence remains high:

  • Peak XV (Sequoia India) raised $1.3 billion for investments across India and Asia-Pacific.
  • General Catalyst committed $5 billion over five years to Indian startups focused on AI, semiconductors, and deep-tech. These funds aim to scale innovations, accelerate commercialization, and expand exports, cementing India’s emerging status as a global innovation hub.

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Diplomatic Engagements: Strengthening Supply Chains & Critical Resources

Diplomacy plays a vital role in fortifying India’s deep-tech ecosystem:

• Joining Pax Silica: India’s recent accession to the US-led Pax Silica coalition underscores its commitment to trusted AI and semiconductor supply chains. This move enhances global credibility and supply chain diversification, countering Chinese influence and securing critical technology sources.

• Trade Agreements & International Partnerships:

  • The India-EU Free Trade Agreement (FTA) negotiations have advanced, promising expanded market access, joint innovation projects, and technology sharing, integral to integrating India into the global deep-tech economy.
  • The US-India trade deal has resulted in tariff reductions to 18%, easing exports of semiconductors, defense electronics, and spectrum-related technologies. Although recent delays have temporarily slowed some negotiations, industry insiders expect renewed talks in the coming months, with clearer tariff guidance to facilitate technology transfer and supply chain integration.
  • Japanese FDI continues to grow, with over Rs 2.7 lakh crore invested and more than 1,400 Japanese firms operating in India, strengthening semiconductor, defense electronics, and advanced manufacturing sectors.

• Critical Minerals & Bilateral Deals: India and Brazil signed a landmark rare-earths and mining agreement, aiming to boost bilateral trade beyond $20 billion. This cooperation is crucial for critical minerals essential in semiconductors and batteries. India is also actively working to mitigate US tariffs on raw materials, seeking to secure domestic mineral sources and diversify supply chains.

• High-Level Canada Visit & Strategic Partnerships: Recently, Prime Minister Narendra Modi hosted a high-profile visit from Canadian officials, including Mark Carney, a prominent figure in Canada's economic diplomacy. Discussions focused on trade expansion, uranium supply, defense cooperation, and critical minerals, aiming to broaden India’s strategic partnerships amid geopolitical tensions and supply chain vulnerabilities.

• Israel-India Defense & Tech Cooperation: A recent high-level visit by Prime Minister Modi to Israel has further advanced defense and strategic technology collaboration. Strengthening defense procurement and technology transfer agreements, particularly in electronic warfare, missile systems, and cybersecurity, reinforce India’s commitment to indigenous defense capabilities and cutting-edge tech integration.

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Emerging Challenges and Strategic Responses

Despite the vibrant momentum, recent diplomatic setbacks present hurdles:

• The postponement of the India-US trade negotiators’ visit has temporarily slowed progress on semiconductor cooperation, tariff clarity, and technology sharing. Industry experts indicate that trade talks are expected to resume in the next quarter, with renewed focus on diversification and domestic capability building.

• In response, India is accelerating domestic R&D, expanding critical mineral sourcing, and strengthening defense-industry collaborations to mitigate geopolitical risks and ensure supply chain resilience.

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Current Status and Future Outlook

Prime Minister Modi’s recent remarks highlight India’s strengthened diplomatic stance and strategic independence. The integrated approach—combining massive infrastructure investments, diplomatic agility, private sector dynamism, and talent cultivation—is redefining India’s position in the global deep-tech landscape.

India is aggressively pursuing indigenous capabilities in semiconductors, defense systems, spectrum management, and AI hardware, while forging strategic partnerships like Pax Silica, India-EU agreements, and Brazilian mineral collaborations to secure supply chains.

Although some delays, particularly in US trade negotiations, pose short-term challenges, India’s diversification strategies, domestic capacity augmentation, and long-term strategic focus reinforce its trajectory toward technological self-reliance and leadership.

In sum, India’s deep-tech evolution in 2024 is an active, multi-layered effort—driven by strategic investments, diplomatic mastery, and industry innovation. As geopolitical dynamics shift and global uncertainties persist, India’s unwavering commitment to self-reliance and technological sovereignty positions it as a key architect of future global standards in security, economic growth, and technological innovation.