1. As India expands its semiconductor manufacturing capacity, what could be the implications for power requirements and the need for reliable renewable energy?
India’s semiconductor ambitions will create a large electricity demand. Semiconductor fabs are significantly energy-intensive because electricity is required not only for manufacturing equipment but also for cleanrooms, cooling systems, ventilation, ultra-pure water, compressed air, vacuum systems and gas-handling infrastructure. Industry data indicates that for a single semiconductor fab, around 100 megawatt-hours per hour[1] of electricity is required. Further, it is extremely critical to have uninterrupted electricity as even a short power disturbance can disrupt production and result in material losses.
The Indian Government is now supporting a much broader semiconductor ecosystem. As of July 2026, 12 semiconductor manufacturing units with investments exceeding ₹1.64 lakh crore have been approved[2]. Therefore, the requirement is not simply for more electricity, but for 24×7, high-quality and increasingly low-carbon electricity.
Renewable energy can meet a significant portion of the energy requirement, but it will need to be combined with storage, grid connectivity and appropriate balancing arrangements to provide the consistency that semiconductor manufacturing requires.
2. What role could open-access renewable power play in meeting the growing electricity requirements of semiconductor manufacturing?
Open access could become one of the most important mechanisms for semiconductor manufacturers to procure renewable electricity directly from the market rather than relying entirely on conventional grid supply.
The Green Energy Open Access Rules, 2022 lowered the eligibility threshold to 100 kW[3], thereby allowing commercial and industrial consumers to procure renewable power through open access. The framework also provides mechanisms around banking and streamlined approval of open-access transactions.
For a semiconductor manufacturer, this creates the possibility of entering into long-term renewable power purchase arrangements, including solar, wind or hybrid projects, and potentially combining these with storage.
3. How can energy storage solutions support semiconductor manufacturers in meeting their power requirements while using renewable energy?
Energy storage can ensure that semiconductor manufacturers get reliable, high-quality power even when renewable generation fluctuates.
Solar and wind generation naturally fluctuate, whereas a semiconductor fab requires continuous electricity. Battery Energy Storage Systems can therefore be used to shift renewable generation to periods of higher demand, manage peak loads and provide short-duration backup. More importantly, storage combined with robust power-management systems can address momentary interruptions, voltage fluctuations and other power-quality issues that can be particularly damaging to semiconductor production.
India has already recognised the importance of storage in its renewable-energy transition. The Ministry of Power has approved a Viability Gap Funding (VGF) scheme for 30 GWh of Battery Energy Storage Systems (BESS), in addition to the 13.2 GWh already underway and this Rs 5,400 Crore Viability Gap Funding (VGF) scheme for Battery Energy Storage Systems (BESS) aims to attract Rs 33,000 Crore in investment, meeting the country’s BESS requirement by 2028[4].
For semiconductor manufacturers, therefore, storage should increasingly be viewed not merely as a decarbonisation tool but as part of the core power-reliability infrastructure of the fab.
4. What are the key customs and tax implications for companies importing specialised semiconductor equipment and critical inputs into India?
The Government has specifically identified machinery, electrical equipment, instruments and parts used for semiconductor wafer fabrication and for assembly, testing, marking and packaging for BCD exemptions, subject to the applicable conditions and actual-user requirements. Specified semiconductor inputs and semiconductor-related goods also receive customs-duty concessions under relevant notifications. The positive aspect is that India already provides significant customs-duty support for semiconductor manufacturing and therefore, semiconductor manufacturers need to undertake very detailed product-level customs classification and eligibility analysis.
Companies should not assume that every item described commercially as “semiconductor equipment” will automatically qualify for an exemption. The HS classification, technical specifications, end-use, notification conditions, actual-user requirements and documentation need to be examined individually.
Therefore, from a policy perspective, India has made a strong start on customs facilitation, but from an industry perspective, certainty of classification and faster, more consistent customs clearance for highly specialised equipment and inputs will be critical as fabs move from construction into commercial production.
5. What policy measures are needed to support semiconductor manufacturing and greater localisation of the semiconductor supply chain?
The first phase of India’s semiconductor policy has attracted major investments. The Government has now approved Semicon 2.0 with an outlay of ₹1.275 lakh crore[5], with a much stronger emphasis on semiconductor equipment, materials, R&D, design and talent development. India now needs to simultaneously move from “fab attraction” to “ecosystem development.”
Going forward, following five priorities should be the focus point:
- Localise semiconductor equipment and materials particularly specialty chemicals, gases, wafers and precision manufacturing equipment[6].
- Build reliable infrastructure around semiconductor clusters including uninterrupted power, renewable energy, storage, water and logistics[7].
- Create a globally competitive tax and customs environment with relevant exemptions and faster clearance.
- Invest in skills and R&D for sustainable growth and precision manufacturing semiconductor industry
- Develop downstream demand through sectors such as EVs, renewable energy, telecom, defence, industrial electronics and data centres[8].
The ultimate objective should therefore be to create an ecosystem where India is not simply assembling or fabricating chips using imported inputs, but is progressively building the entire semiconductor value chain domestically.
6. How could semiconductor growth support allied clean-energy sectors such as solar, EVs, batteries and power electronics?
Semiconductor growth can strengthen clean-energy sectors by supplying critical chips and power electronics for solar inverters, EVs, charging systems, batteries, energy storage and grid equipment. This can create a virtuous cycle: domestic semiconductor manufacturing supports cleaner, more efficient technologies, while renewable energy provides reliable, low-carbon power to semiconductor fabs.
7. What opportunities could India’s semiconductor expansion create for the renewable energy and power ecosystem, particularly in renewable power and energy storage?
This is one of the most significant, but less discussed, spillover opportunities from India’s semiconductor programme.
India’s semiconductor expansion could create major opportunities for renewable power and energy storage by making fabs anchor customers for reliable, round-the-clock clean energy. This could drive long-term renewable PPAs, open-access and captive projects, solar-wind hybrids, battery storage and integrated low-carbon energy infrastructure around semiconductor clusters.
Therefore, semiconductors and renewable energy are not two separate policy stories, but as complementary pillars of India’s next phase of industrialisation. The semiconductor industry will create substantial demand for reliable clean power, while the clean-energy transition will create a growing domestic market for the very semiconductor technologies.
