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Nagpur’s Growing Role in India’s Semiconductor Sector

Nagpur’s Growing Role in India’s Semiconductor Sector
Nagpur’s Growing Role in India’s Semiconductor Sector

Industrial estates on the outskirts of Vidarbha's Nagpur have long supported various manufacturing activities.


Over the past year, attention has shifted towards their potential contribution to one of India’s most strategically significant technology sectors of semiconductor manufacturing.


As the country accelerates efforts to reduce its dependence on imported chips and grow its domestic capacity, Maharashtra’s second capital is gradually entering the conversation.



India’s Semiconductor Strategy and State-Level Alignments


India's semiconductor policy has become one of its most heavily funded initiatives in the technology space.


Backed by a budget of ₹76,000 crore under the India Semiconductor Mission, the strategy includes subsidies for setting up fabrication plants, assembly and testing units, packaging facilities, and display manufacturing ecosystems.

The goal is to reduce India’s reliance on imported chips, which currently meet 85 per cent of national demand, and to develop an ecosystem that can serve the country’s expanding electronics, automotive, telecom, and AI-driven industries.


The domestic semiconductor market, valued at ₹3,16,540 crore in 2023, is expected to grow to ₹9,07,570 crore by 2030.


The central policy’s structure allows approved projects to receive fiscal support covering up to 50 per cent of capital expenditure. In response, state governments are competing to attract investments by offering complementary incentives such as tax breaks, expedited land allotments, and ready access to industrial infrastructure.



Maharashtra has been active in these efforts, with discussions currently underway with three companies to establish semiconductor units in the state. Among the potential sites under consideration, Nagpur has emerged as a serious candidate.


Although no semiconductor project has been confirmed for Nagpur so far, the city’s existing industrial framework aligns with the minimum requirements for component manufacturing and testing operations.

Locations such as the MIDC Hingna and Butibori Industrial Estates already support mid-to-large-scale manufacturing operations across sectors, including automotive and plastics. The presence of logistics, power supply, and road connectivity to other regions of India strengthens Nagpur’s case as a city with foundational infrastructure already in place.


The Maharashtra government’s intent to develop semiconductor capacity is reinforced by its experience managing industrial zones under the National Manufacturing Policy, such as Dighi and Shendra.


These existing models could inform any future expansion in Nagpur, particularly in areas like Umred, where a 6,000-hectare National Investment and Manufacturing Zone has been proposed.



Industrial Foundations and Corporate Movement

Potential of Semiconductor Industry in Nagpur
Potential of the Semiconductor Industry in Nagpur

Nagpur’s industrial credentials have been shaped by decades of growth in sectors like textiles, engineering, and agro-processing.


The Butibori estate, which spans thousands of acres, remains one of the most significant industrial clusters in the region.


A key development was the July 2024 inauguration of a ₹200 crore medical equipment plant by Horiba India. Although the facility focuses on diagnostics, Horiba’s broader global portfolio includes mass flow controllers, where it holds a 60 per cent market share. These components are integral to semiconductor production processes.

Horiba’s main semiconductor-related operations in India are located in Chakan near Pune. However, its choice of Nagpur for a high-tech diagnostic equipment facility signals confidence in the region’s readiness for precision manufacturing.


The company has indicated plans to expand its semiconductor offerings in India in support of upcoming fabrication and assembly plants, though it has not confirmed specific sites.

The presence of firms like Horiba is particularly relevant because the initial stages of India’s semiconductor ecosystem will rely heavily on component suppliers and testing units before full-fledged fabrication takes root.



The city’s ability to support this value chain is a crucial factor as national and international companies evaluate locations for future investment.


In addition to infrastructure, recent engagements point to increasing attention on Nagpur from industry bodies. The Indo-American Chamber of Commerce hosted a roundtable in the city in early 2024, focusing on opportunities in the semiconductor sector.

These interactions reflect a growing interest in leveraging Nagpur’s potential as part of the wider network of semiconductor-related sites across the country.


Employment Potential and Local Preparedness


If semiconductor projects take root in Nagpur, the city could see a shift in employment patterns. Across the country, approved semiconductor facilities are projected to generate 20,000 direct jobs and 60,000 indirect jobs. These roles include engineering, chip design, testing, fabrication, logistics, maintenance, and administrative support.


Nagpur is home to several institutions that could support these requirements. The Visvesvaraya National Institute of Technology (VNIT), among others, has departments focused on electronics, instrumentation, and materials science.

Alongside government polytechnics and private colleges, these institutions already supply talent to local and national employers. Partnerships between the India Electronics and Semiconductor Association (IESA) and academic institutions are underway in various states to build a skilled workforce for the electronics system design and manufacturing sector. If extended to Nagpur, such collaborations could provide the workforce needed for future investments.



The economic multiplier effect of semiconductor investments is significant. Large-scale plants often employ thousands of workers directly while creating secondary employment through allied services such as construction, transport, and supply chain operations.


Tata’s ₹91,000 crore fabrication plant in Gujarat, for example, is expected to anchor an ecosystem of support industries. Nagpur’s industrial zones have sufficient land and infrastructure to support similar integrated development models.


Training remains an essential aspect of scaling the workforce to meet industry needs. Tailored programmes that align with specific fabrication, packaging, and testing requirements will be necessary to bridge any skill gaps.

The combination of existing educational infrastructure and government-backed training could offer a pathway to employment for a diverse pool of workers across the Vidarbha region.


Competitive Pressures and Regional Outlook

Impact of Competition on the Semiconductor industry of Nagpur
Impact of Competition on the Semiconductor industry of Nagpur

The national semiconductor landscape is rapidly evolving, with several states securing large-scale investments. Gujarat leads the pack with two major projects: Tata’s fabrication facility in Dholera and Micron Technology’s assembly and testing plant, together worth over ₹1.1 lakh crore. Both are expected to be operational by 2025.


Uttar Pradesh has approved two major projects valued at ₹30,700 crore, including a fabrication unit by Tarq Semiconductors and an ATMP plant by Vama Sundari. Assam has also entered the fray with a ₹26,650 crore assembly and testing plant by Tata, scheduled for mid-2025. Karnataka has attracted ₹10,000 crore in investment from Lam Research, which will focus on manufacturing semiconductor equipment.


Each state offers a distinct advantage. Gujarat benefits from its coastal location and an established electronics base. Uttar Pradesh offers proximity to Delhi and large tracts of land for development. Assam’s offering is focused on export-led processing supported by regional subsidies. Karnataka’s strength lies in its track record with global technology firms.


Nagpur’s strengths lie in its central location, multimodal connectivity, and availability of industrial space within existing MIDC zones.

It does not yet have a confirmed project but continues to feature in discussions at the state level. While it may not currently compete directly with states that have secured large fabrication plants, Nagpur is positioned to support component manufacturing, logistics, and testing units that are critical to the semiconductor supply chain.



These functions require less capital investment than fabs and could act as catalysts for deeper industry involvement in the long term. Discussions with companies by the Maharashtra government indicate that the state views Nagpur as a viable site for such supporting functions. The presence of firms like Horiba adds credibility to the city’s readiness, especially in specialised manufacturing sectors linked to semiconductor equipment.


Ongoing policy support from both central and state governments remains critical. Nagpur's future in the semiconductor ecosystem will likely depend on a combination of infrastructure upgrades, industry-academic partnerships, and successful deal-making with prospective investors.

While other states continue to capture headlines with mega projects, Maharashtra’s strategy to engage multiple companies simultaneously and develop sites beyond its traditional industrial belt leaves room for Nagpur to emerge as a serious contender.


The city’s current stage can best be described as a preparatory phase, where groundwork is being laid for potential involvement. Whether this translates into confirmed projects will depend on several factors, but the fundamentals that underpin Nagpur’s inclusion in national-level conversations are already in place.



References




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