India requires a coordinated national strategy built on three interconnected pillars — a resilient electricity grid, an energy-efficient computing supply chain, and a globally competitive semiconductor market — to support large-scale AI infrastructure deployment, according to a new report released on Monday, 25 May. The findings, published jointly by Applied Materials and AMCHAM India, warn that physical infrastructure gaps, particularly in power delivery, remain the single largest constraint on India's AI ambitions.

The Three-Pillar Framework

The report lays out a framework in which each layer of the AI stack is treated as interdependent. The first pillar calls for a stronger, more resilient electricity grid capable of handling the large, continuous, and reliable power demands of advanced computing workloads. The second pillar covers the computing supply chain — spanning algorithms and system design all the way through to semiconductor equipment and materials. The third pillar focuses on developing competitive semiconductor markets that can translate infrastructure capability into sustainable economic growth.

'Semiconductor design and manufacturing, compute deployment, research and innovation, and power generation and delivery are interdependent. Weakness in any one layer constrains the entire system; strength across all layers enables scale, efficiency, and resilience,' the report stated.

The Power Grid Warning

Ranjana Khanna, Director General and CEO of AMCHAM India, was direct about the urgency. 'We urge energy policymakers to consider that the electricity grid is the single largest constraint on India's AI ambitions. Non-fossil sources represent over 52 per cent of installed capacity,' she said. The report noted that advanced AI workloads demand power at a scale and consistency that India's current grid is not yet structured to guarantee.

India's Structural Advantages and Gaps

The report acknowledged that India holds meaningful structural advantages — a large engineering talent pool, a digital economy with over one billion users, and growing policy support for both AI and semiconductors. India's policy framework has already mobilised capital and institutional backing across both domains. However, the report cautioned that ambition alone cannot substitute for physical infrastructure readiness.

Semiconductor Mission and What Comes Next

India's planned fabrication capacity, backed by ₹1.6 lakh crore in investments under the India Semiconductor Mission (ISM), was highlighted as a foundation — but an insufficient one without deeper indigenous know-how. Khanna called for ISM 2.0's focus on indigenous equipment and materials to be prioritised 'with the same urgency as fab expansion itself.' The report's central proposition is that AI infrastructure must be planned and executed as a connected national system, not a collection of isolated projects. How quickly India can close its power and supply chain gaps will determine whether its semiconductor and AI ambitions translate into durable economic scale.