Archive · 24 Aug 2026
India Plans New Rules to Support Semiconductor, Auto Manufacturing
India wants more companies to build semiconductor and car parts factories in the country.
Some companies said India’s current rules make this difficult.
Commerce Minister Piyush Goyal said the government will change the rules within two months.
India is also making standards and approvals easier.
The government has approved a large program called Semicon 2.0 to grow the semiconductor industry.
India and private companies hope to invest about USD 50 billion in related industries over the next year and a half.
Goyal said India wants to work with Japan on artificial intelligence and semiconductor technology.
He also said India should be seen as a strong investment partner, not only as an alternative to China.
Commerce Minister Piyush Goyal said India will amend regulations within two months to address concerns from semiconductor equipment and auto-component manufacturers.
The government is simplifying the Bureau of Indian Standards framework and working to ease approval processes for suppliers.
India’s Union Cabinet approved Semicon 2.0, with a budget outlay of Rs 1,27,500 crore for semiconductor design and manufacturing.
Goyal said India and the private sector aim to seed about USD 50 billion in semiconductor and related industries over the next 18 months.
Goyal presented India as an independent investment destination and called for India-Japan cooperation on trusted, full-stack artificial intelligence development.
- Who
- India’s Commerce and Industry Minister Piyush Goyal, the Indian government, semiconductor equipment manufacturers, auto-component manufacturers, and private-sector companies.
- What
- India plans to amend regulations and introduce new rules to address manufacturing concerns, while expanding its semiconductor ecosystem and cooperation with Japan on artificial intelligence.
- When
- Within the next two months for the regulatory changes; the proposed semiconductor investment is targeted for the next year and a half.
- Where
- India, with the announcements made during a fireside chat with Nikkei Asia.
- Why
- To facilitate manufacturing investment, simplify standards and approvals, develop India’s semiconductor industry, and strengthen trusted India-Japan cooperation in artificial intelligence.
Industry Requests and Easier Approvals
Government Safeguards and Fair Trade
Regulatory flexibility
Industry Requests and Easier Approvals
Semiconductor equipment and auto-component companies raised concerns about existing regulations and sought changes to support manufacturing in India.
Government Safeguards and Fair Trade
Goyal said the government will amend regulations and introduce rules within two months, while preserving its ability to set conditions for sectors affected by unfair trade.
Import and trade controls
Industry Requests and Easier Approvals
Some industry demands may involve importing goods from other countries, according to Goyal’s account of the concerns raised.
Government Safeguards and Fair Trade
Goyal said India may reject demands when imports could undermine fair trading practices or involve goods supplied at predatory prices.
India’s investment positioning
Industry Requests and Easier Approvals
Companies may view India in the context of shifting production and investment across countries, including China-related supply-chain decisions.
Government Safeguards and Fair Trade
Goyal said India should be considered an independent investment destination that stands on its own merits, rather than merely a “plus-one” alternative to China.
- Official
- Piyush Goyal, India’s Commerce and Industry Minister
- Regulatory timeline
- New or amended rules are expected within two months.
- Industries concerned
- Semiconductor equipment and automotive components
- Semicon 2.0 budget
- Rs 1,27,500 crore
- Targeted industry seeding
- About USD 50 billion in semiconductor and associated industries over the next year and a half
- Standards framework
- The government says it has significantly simplified the Bureau of Indian Standards framework.
- Technology cooperation
- India and Japan are discussing a full-stack approach to artificial intelligence, including models, applications, equipment, computing, data centres, and energy.