Mint Explainer: What will happen if the US restricts chip supply to India?

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Subscribe to enjoy similar stories. NEW DELHI : A measure that prevented open market access to semiconductors created by American companies was one of the last few executive orders signed by outgoing US president Joe Biden about a month ago. Biden exempted 18 nations but left out India—a key strategic geopolitical ally of the US in Asia.

The move triggered conversations about the global semiconductor market, US dominance, the lopsided chip industry, and what would happen if the US imposed even more severe restrictions on India’s access to processors. The move would deal a significant blow to India’s large corporations across industries—not just to core technology firms. Today, silicon chips are used in nearly every industry—automobiles, energy, financial services, manufacturing, and even space.

While not all of them are cutting-edge chips built by the likes of Nvidia Corp. and Qualcomm Inc., even older generation chips are largely built and designed by US tech firms. India does not have this capability yet.

Then, there is the consumer electronics industry, which is slowly but steadily capturing an increasing share of the domestic economy. In January, Mint reported that the electronics industry generated nearly $145 billion in revenue in 2024. The Centre announced that this sector could contribute $500 billion, or nearly 7%, to India’s $7 trillion economy goal by 2030.

With increasing proliferation, this figure is only likely to rise and not slow down. Chips, on this note, are vital to this industry. If such a ban happens, there will be an undoubted impact on the domestic market.