Government of India has approved an expanded set of incentives aimed at accelerating domestic manufacturing of compound semiconductors and advanced packaging, marking a significant step in building strategic depth across critical technology supply chains.

The enhanced support framework is designed to attract investment into high value segments such as compound semiconductors, which are essential for power electronics, electric vehicles, renewable energy systems and defence applications. By widening the scope of incentives, the government is signalling a clear intent to move beyond conventional silicon and build capabilities in next generation semiconductor materials.

Officials indicated that the initiative aligns with India’s broader ambition to create an end to end semiconductor ecosystem. Alongside wafer fabrication, the policy places emphasis on advanced packaging, testing and specialised manufacturing processes that are increasingly central to performance gains in power and high frequency devices.

Industry stakeholders view the move as a timely intervention. Demand for compound semiconductors is rising sharply as electric mobility scales, power efficiency becomes a strategic priority and defence systems require more robust and reliable electronics. Expanded incentives are expected to lower entry barriers, encourage technology partnerships and accelerate localisation across these segments.

The government also highlighted the role of the policy in strengthening supply chain resilience. By anchoring compound semiconductor manufacturing domestically, India aims to reduce external dependencies while positioning itself as a credible global partner in critical electronics and defence related supply chains.

As global semiconductor strategies increasingly focus on specialisation rather than scale alone, India’s expanded incentive push reflects a long term vision to build relevance where technology intensity, reliability and strategic value converge.