India aims to develop its first indigenous graphics processing unit within 24 months, according to S Krishnan, secretary of the nation's IT ministry. The GPU is the linchpin of India's broader strategy to build a complete domestic AI stack—from accelerators and servers to power infrastructure, models, and applications.
The initiative is backed by a second round of semiconductor incentives totaling ₹1,27,500 crore (approximately $15.3 billion). The package offers a 35 percent subsidy for advanced packaging facilities and 40 percent for new fabrication plants, designed to attract manufacturers and accelerate domestic production.
The 24-month timeline is aggressive for developing complex semiconductor hardware. Success would give India direct control over a critical input for AI infrastructure and reduce its reliance on U.S. and Taiwanese suppliers at a time when geopolitical tension over semiconductor access is rising. Local semiconductor and AI companies would gain a protected domestic market and potential cost advantages.
The economic logic is straightforward: whoever owns the silicon stack owns the margin structure. By controlling GPUs, India avoids paying foreign suppliers' markups and gains sovereignty over the data flowing through AI systems built on local chips—a material advantage for both national security and the economics of India's growing AI industry.
