India says it cannot build electronics without China and has started easing the rules to prove it

India’s candid acknowledgment of its reliance on Chinese supply chains underscores the fundamental contradiction in its semiconductor ambitions. Technologically, attempts to decouple from China will create severe disruptions in upstream sectors such as EDA tools, equipment, and materials, especially in advanced nodes like EUV lithography and 3D packaging. From a compliance standpoint, while relaxed regulations ease foreign investment entry, they do not eliminate supply chain vulnerabilities, forcing companies to absorb higher operational and geopolitical risks. In market dynamics, firms from Taiwan, South Korea, and Japan are likely to accelerate investments in India to capitalize on policy openings, while local players struggle with technological gaps and capital constraints. Over the next 12–24 months, India’s semiconductor push will likely face a prolonged struggle between policy enthusiasm and technical realities, with little sign of breakthrough unless substantial R&D and investment are mobilized.