In News:

Union Finance Minister Nirmala Sitharaman and IT Minister Ashwini Vaishnaw jointly launched the NITI Aayog Frontier Tech Hub's report titled "Future of India's Semiconductor Industry" — India's first comprehensive 10-year roadmap for the semiconductor sector. The joint launch signals cross-ministerial ownership across Finance, MeitY, and NITI Aayog.

India's Current Status

• India currently does not possess a fully operational semiconductor fabrication plant. The first fab, expected in Dholera, Gujarat, may become operational by 2028. Around 10 semiconductor projects are under various stages of development. India imports nearly all its semiconductor requirements, making the economy vulnerable to global supply chain disruptions.
• The Union government had earlier launched the India Semiconductor Mission (ISM) with a corpus of ?76,000 crore, providing capital subsidies of over 50% for fabrication units, supporting compound semiconductors, packaging facilities, and design-linked incentives for startups.

Key Findings of the Report

• The report explicitly states that India's local ecosystem is not ready to fully meet domestic demand. Many semiconductor components used in defence systems are sourced from outside India, posing national security risks.
• Taiwan dominates global chip manufacturing; a disruption there could massively impact India's electronics supply chain. Fabrication units require 4–5 years before commencing production, and the sector demands "sustained, mission-mode commitment over a decade or more."

Strategic Vision: $120–150 Billion by 2035

• The report presents a strategic blueprint to establish a USD 120–150 billion semiconductor ecosystem by 2035. Rather than competing in the capital-intensive race for cutting-edge wafer fabrication, the roadmap advocates a "More-than-Moore" strategy focused on mature logic nodes, advanced OSAT (Outsourced Semiconductor Assembly and Test) packaging, and specialised wide-bandgap compound materials.

Capital Requirements and ISM 2.0

• The report estimates state capital expenditure of $45–60 billion over a decade for the second phase (ISM 2.0). The roadmap directly reinforces priorities announced under India Semiconductor Mission 2.0 in Union Budget 2026, marking India's shift from ecosystem creation to ecosystem deepening — from attracting investments to developing deeper capabilities across design, materials, manufacturing, packaging, talent, R&D, and trusted global partnerships.

Strategic Focus Areas

• The report steers away from frontier chips (3–7 nanometre nodes) where risks are very high, and instead prioritises mature and advanced nodes, compound semiconductors for defence and industrial applications, and advanced chip packaging as a "core production pillar." Clear goals include positioning India as a leading global destination for advanced packaging and OSAT, building leadership in compound semiconductor manufacturing, and creating more than 100 advanced semiconductor design IPs.

Trusted Partners and Geopolitics

Priority partner nations identified are the United States, Japan, the European Union, and South Korea — for access to critical tools, technology transfer, and joint R&D. The report implicitly treats China as an adversarial player, reflecting the broader global semiconductor realignment away from Chinese supply chains.

In News:

Recently, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce Ministry will release a revised Wholesale Price Index (WPI) series with 2022-23 as the new base year, replacing the 2011-12 series. Simultaneously, India will introduce a comprehensive Producer Price Index (PPI) framework — with the WPI expected to be discontinued by 2031 after a five-year transition.

This reform is part of India's broader statistical overhaul in 2026, following base year revisions to GDP, CPI, and IIP — all updated to 2022-23.

Key Features of the Revised WPI

The commodity basket has been expanded from 697 items to 957 items, with new additions including solar energy, wind energy, nuclear electricity, and other emerging sectors. The revised series will be released with data from May 2026, along with a back-series from April 2023.

The New PPI Framework

Three types of PPIs will be released simultaneously on June 15:

• Output PPI measures prices received by producers at the farm gate or factory gate. It excludes indirect taxes and trade/transport margins. It will initially cover 125 items, expanding to approximately 1,500 items once the WPI is discontinued. This index will be released monthly, with a back-series from April 2023.
• Input PPI (experimental) measures prices paid by producers for inputs, including trade and transport margins. It is being introduced for the manufacturing sector on a trial basis starting March 2026, with validation expected over approximately two years.
• Services PPI covers seven major services: banking, securities transactions, insurance, pension fund management, railways, air passenger transport, and telecommunications. It will be released quarterly, with the first data covering January–March 2026.

All three PPIs carry 2022-23 as the base year.

Why Transition from WPI to PPI?

WPI only tracks goods prices, leaving India's increasingly service-driven economy out of the measurement framework. PPI addresses this gap. Additionally, the output PPI is more consistent with the national accounts framework — the IMF and other global institutions have long advocated PPI adoption for accurately deflating nominal GDP into real GDP. Currently, India uses a combination of WPI and CPI to compute real GDP; once the PPI series stabilises, the output PPI is expected to serve as a more accurate deflator, improving the robustness and international comparability of India's GDP estimates.

Five-Year Transition (2026–2031)

WPI remains widely embedded in long-term procurement contracts, infrastructure agreements, construction projects, and price escalation clauses. To avoid disruption, WPI and PPI will be published in parallel for five years. The Ministry of Finance's Department of Expenditure will issue a circular directing users that fresh long-term contracts extending beyond 2031 should adopt PPI-based escalation mechanisms.

Challenges

Building reliable producer-level price databases — especially for services — is complex. Input PPI remains experimental. Industries and government departments must adapt existing contracts and data frameworks progressively.

Way Forward

• Strengthen data collection infrastructure: Robust producer-level price databases must be built across manufacturing and service sectors. This requires capacity building in statistical agencies, particularly at the district and firm level.
• Validate the Input PPI: The experimental input PPI for manufacturing needs rigorous quality testing and stakeholder feedback over its trial period before it can be formally adopted.
• Expand services coverage: The initial services PPI covers only seven sectors. A roadmap must be developed to progressively include sectors such as healthcare, education, real estate, and IT services.
• Facilitate contractual transition: Government departments, PSUs, and private firms need clear guidelines and legal frameworks to seamlessly migrate price escalation clauses from WPI to PPI in long-term contracts before the 2031 deadline.
• Coordinate with RBI and MoSPI: Close coordination between DPIIT, MoSPI, and the Reserve Bank of India is essential to ensure PPI data is reliable enough to eventually serve as a GDP deflator, strengthening the quality of national income estimates.

Conclusion

India's transition from WPI to PPI is not merely a statistical exercise — it reflects the structural transformation of the Indian economy from a goods-dominated to a services-led one. The simultaneous release of output PPI, input PPI, and services PPI, alongside the revised WPI, marks a decisive step toward aligning India's price measurement architecture with global best practices. Together with the recent revisions in GDP, CPI, and IIP, this reform signals a maturing of India's statistical system, which is foundational to sound policymaking, credible GDP estimation, and investor confidence.