Semiconductors have emerged as the fourth most traded product globally following crude oil, refined petroleum, and automobiles with global sales reaching USD 630 billion in 2024. As a core component of modern electronics and industrial applications, semiconductors are now central to national strategies, with economies worldwide seeking greater control and autonomy in this strategic sector.
Over the past few decades, semiconductor production has witnessed a significant geographic shift from Silicon Valley to East Asia, a phenomenon often described as the “rising East and declining West.” Simultaneously, the industry has evolved from the vertically integrated IDM (Integrated Device Manufacturing) model to a distributed global value chain involving distinct players in design, manufacturing, and testing, many of which are based in emerging economies.
This transformation driven by national policies and market dynamics, has opened significant opportunities across the semiconductor value chain, it has also intensified global competition. Moreover, geopolitical developments such as the Russia–Ukraine conflict and the US–China trade tensions have heightened the complexity of managing global semiconductor logistics.
A key challenge in this landscape is ensuring resilient and secure supply chains, particularly for economies still developing the logistical infrastructure needed to handle the semiconductor industry’s stringent requirements. India, despite its rapidly advancing semiconductor ambitions, continues to face such challenges.
India’s Semiconductor Landscape
India’s semiconductor market was valued at USD 40 billion in 2024 and is projected to reach USD 120 billion by 2030. The India Semiconductor Mission (ISM), under the Ministry of Electronics and Information Technology (MeitY), is spearheading the country’s semiconductor development agenda, backed by a USD 10 billion investment under the Production-Linked Incentive (PLI) scheme.
Strategic partnerships with global leaders such as PSMC (Taiwan) are positioning India as a key player in design and manufacturing. Key semiconductor clusters are emerging in Dholera and Sanand (Gujarat), Jagiroad (Assam), and Hosur (Tamil Nadu), with companies like Micron and Tata Electronics leading infrastructure development for fabrication, assembly, testing, and packaging.
However, to fully capitalize on these investments, India must urgently develop an integrated domestic logistics ecosystem to support the semiconductor value chain.
Logistics Infrastructure: Challenges and Needs
India’s semiconductor logistics capabilities remain at an early stage of development. Seamless integration with the broader logistics ecosystem is a pressing requirement. Critical capability gaps include:
- Vibration control and air suspension vehicles
- Temperature-controlled transport systems
- Temperature-regulated warehousing
- Cleanroom logistics facilities meeting Class 10,000 standards
- Trained personnel for handling semiconductor-grade cargo
- Secure storage for chemicals and ESD-sensitive materials
One of the major constraints lies in import logistics. Currently, Indian ports lacks the infrastructure and procedural standardization to handle highly sensitive semiconductor equipment. The absence of shock-proof unloading mechanisms, standardized operating procedures (SOPs), and trained customs personnel often results in cargo damage during examination. This situation calls for immediate government intervention, including the implementation of green corridors to ensure expedited customs clearance, inspection, and inland movement.
Solutions and Strategic Interventions
The adoption of Direct Port Discharge (DPD) in conjunction with Advanced Shipment Notice (ASN) systems is expected to fast-track customs processing and reduce mishandling of sensitive cargo. These measures will lower inventory holding costs, reduce port congestion, and improve end-to-end supply chain efficiency.
Moreover, Indian ports must adopt automated protocols for prioritizing top-deck containers, which often carry critical semiconductor equipment. Delays in unloading such containers frequently disrupt production timelines. Prioritizing immediate offloading and direct dispatch from ports to plant sites can help mitigate risks of damage and unnecessary handling.
Road infrastructure presents another challenge, particularly in connecting ports to emerging semiconductor hubs. For example, Jagiroad in Assam depends heavily on road and rail transport from Kolkata Port. However, poor exit infrastructure from the port and subpar roads delay and compromise the transport of sensitive cargo. While rail remains a viable alternative, issues such as component damage during abrupt halts require attention through cushioning protocols or shock-absorbing carriage design.
Industry Participation and Capability Building
Currently, only a few global players possess the capabilities to handle semiconductor logistics in India. There is a pressing need to develop a domestic logistics ecosystem with integrated capabilities. While several logistics providers in India offer discrete services such as temperature-controlled trucking, air suspension vehicles, or hazardous cargo handling very few can integrate these features into a single offering suited for semiconductors.
For example, India lacks sufficient availability of vehicles that combine air suspension with temperature control or modular cleanroom environments. However, several domestic logistics companies have expressed willingness to develop such capabilities, provided there is industry support and sufficient demand to justify the investment.
As manufacturing and warehousing capacities expand, transportation and logistics capabilities must keep pace. This calls for a concerted effort involving government policy, industry collaboration, and supply chain innovation.
The Way Forward
To unlock India’s full potential in the semiconductor industry, the following steps are critical:
- Government Support: Expedite green corridor clearance at ports, implement DPD with ASN, and prioritize top- deck container handling.
- Infrastructure Development: Improve port exit infrastructure, especially for routes connecting key hubs like Jagiroad, Assam.
- Incentivize Domestic Logistics: Offer targeted incentives to logistics providers to upgrade fleets and adopt semiconductor-grade transport capabilities.
- Stakeholder Collaboration: Foster partnerships between OEMs, government agencies, and logistics companies to build a cohesive and secure logistics network.
India is strongly positioned to become a global semiconductor powerhouse, spanning design, manufacturing, warehousing, and logistics. However, success will depend not only on production capabilities but also on building a robust, specialized, and responsive logistics ecosystem. In the face of evolving global supply chain challenges, India must align its physical infrastructure with its strategic policy ambitions.
With the right mix of government facilitation, industry commitment, and logistics innovation, India can emerge not just as a manufacturing hub but as a regional logistics anchor in the new global semiconductor order.
Bhasker Canagaradjou
Executive Vice President Business Research
