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The US private sector has continued to demonstrate enthusiasm for the Indian semiconductor ecosystem as evidenced by new plans for a manufacturing facility in Odisha focused on glass substrates and backed by Intel and Lockheed Martin.

Benefits of semiconductor cooperation

As the Trump administration rethinks the economic relationship with India and its policy approach to the global semiconductor ecosystem, the progress of the past three years appears fragile – in this context, the case for maintaining the upward trajectory in US-India semiconductor cooperation must be made.

India has proactively positioned itself as an increasingly important player in the global semiconductor ecosystem, representing a capable partner in strategic technology for the United States.

The central government has adopted a robust policy agenda to boost India's chip sector – through the National Semiconductor Mission , the Indian state has committed to spending US$8.6 billion and approved 10 manufacturing facilities across the country between 2023 and 2025.

In addition to this principal initiative, the Indian government under Modi has taken strides to develop a more permissive regulatory environment for manufacturing and foreign investment, particularly in emerging technology, via production-linked incentives (PLIs), special economic zones (SEZs), and industrial corridors .

These policies have laid the groundwork for an ascendant Indian semiconductor industry ready to deliver on partnerships with the US private sector.

India's unique talent pool also makes the country an attractive partner for the United States. India already accounts for 20% of the world's chip engineers, many of whom work at the Indian offices of major US companies such as Qualcomm, Intel and Nvidia.

Notably, the US and Indian talent pools largely complement each other: While US firms excel in chip architecture, they lag behind in the later stages of the semiconductor supply chain. By contrast, India is emerging as an assembly and testing hub, offering opportunities for US firms with strategy and design competencies.

Such US firms are already betting on the next generation of Indian talent. California-based Lam Research has pledged $29 million in software licenses as part of a collaborative effort with the Indian Institute of Science to train nearly 3,000 engineers.

As the US semiconductor industry faces a growing labor shortage in the coming years, access to skilled, cost-effective Indian engineers working across the chip supply chain would represent a boon.

With India's capability rising steadily – see, for instance, the recent announcement of the first indigenous Indian microprocessor, developed by the Indian Space Research Organization – now is the time to cement such a partnership.

Greater US-India cooperation would also directly address core risks in the semiconductor supply chain. The just-in-time manufacturing model, long lead times and specialized knowledge requirements generate deep vulnerabilities, exacerbated by overreliance on suppliers from East Asia amid China's growing influence.

US-India cooperation holds the potential to boost the resilience of semiconductor supply chains by diversifying fabrication away from traditional strongholds in East Asia, leveraging localization amid a remarkable surge in electronics manufacturing in India and promoting visibility through government-level alignment and private sector R&D linkages.

Diversification has been a well-established component of recent US semiconductor policy, but localization also deserves attention. US companies betting big on electronics manufacturing in India – Apple , for example – would benefit immensely from a robust Indian semiconductor ecosystem.

As Chinese industrial policy has convincingly demonstrated, such clustering undergirds global competitiveness. And as firms like Apple have also shown, the pursuit of diverse and resilient global supply chains can complement investment in US manufacturing rather than replace (or displace it).

Deepening cooperation

To deepen US-India cooperation on semiconductors, the US government should encourage US semiconductor companies to invest in the Indian ecosystem. One path could be to facilitate such investments by Intel's fabrication subsidiary.

The decision to take a 10% stake in Intel underlines the Trump administration's strategic objective to promote a national champion that excels across the semiconductor supply chain, from design to fabrication.

In addition to expanding its existing domestic operations , Intel Foundry will also likely look to bolster its international footprint . India would be an excellent destination, and Intel's backing of an advanced packaging unit in Odisha demonstrates its willingness to invest in India, should conducive political and economic conditions remain.