India, July 24 -- In 2025, India's smartphone exports crossed a threshold that should change how India thinks about industrial policy. With exports of about Rs.2.6 lakh crore, the smartphone became the country's largest exported product category, ahead of diesel fuel and cut diamonds. A decade earlier, India was overwhelmingly an importer of handsets. Recently, the Union Cabinet approved the Rs.62,000-crore Mobile Phone Manufacturing Scheme, and Semicon 2.0 with an outlay of Rs.1.3 lakh crore. The two initiatives demonstrate the next stage of a deliberate climb, from assembly to component manufacturing, design, intellectual and property creation, resulting in globally competitive Indian firms. The mobile-phone experience shows what disciplined policy can achieve. India's electronics production reached Rs.13 lakh crore in 2025-26, while exports touched Rs.4 lakh crore. Domestic value addition has risen from about 15% to 23%. The mobile ecosystem supports roughly 12 lakh direct and indirect jobs, and women constitute nearly 70% of its direct workforce. This is more than an export success. It is industrial policy creating formal work and confidence that India can execute at global scale. For years, the Western world, through the Washington Consensus, advocated a free-market regime where hyperglobalisation helped them maintain dominance. The government was asked to stay away from picking industrial winners. However, that view has not survived geopolitics. The US, EU, Japan, South Korea and China now treat semiconductors, batteries, clean technology and advanced manufacturing as strategic infrastructure. Supply chains determine not only competitiveness, but national resilience. India's approach is, therefore, not a retreat from reform. It is an attempt to update reform for a world in which technology, trade, and security have converged. Semicon 2.0 is the upstream counterpart to India's Electronic Manufacturing stack. Under the first Semicon mission, 12 manufacturing projects with investment exceeding Rs.1.64 lakh crore were approved, and Micron, Kaynes, andCG Semi have begun commercialproduction. The second phase broadens the agenda beyond fabs to six connected pillars: chip design, machines andmaterials, additional fabricationcapacity, advanced packaging, research and talent. This is the right architecture because semiconductor sovereigntyis not achieved by building oneexpensive factory. It comes from dense networks of designers, equipmentspecialists, chemical suppliers, clean-room technicians, research institutions, and customers. The strategic logic is strongest when the schemes are seen as a "one value-chain" policy. The Electronics Components Manufacturing Scheme is intended to localise printed circuit boards, camera modules, passive components, sub-assemblies and capital goods. Semicon 2.0 pushes further upstream, while the new mobile scheme pulls downstream firms towards design and brands. Each layer improves the business case for the next. Now, India must confront the ownership question. A chip may be designed in Bengaluru and packaged in Gujarat or Assam, yet a large part of its value can still flow offshore through licence fees and recurring royalties on foreign intellectual property. PwC estimates that such payments can absorb 25-35% of the budget of an industry-leading chip-design project. Processor cores, interface blocks, verification IP, and design tools are indispensable, butas sales rise, per-unit royalties risewith them. India could build thefactories, employ the engineers, and export the products while overseas owners of foundational IP capture much of the economic rent. The answer is not autarky; it isownership in chosen layers. India should accelerate sovereign processor cores, artificial intelligence (AI) accelerators, secure interconnects, indigenouselectronic-design-automation capability and foundational patents in advanced packaging. Open architectures can reduce royalty exposure wherecommercially sensible. This is alsothe hardware foundation of sovereign AI. Sovereign AI must include Indian-owned compute IP, not merely locally hosted models. Capital policy must reinforce that ambition. India has roughly a fifth of the world's semiconductor design talent, but much of it works inside foreign captive centres. The government has indicated that it will co-invest with venture funds in eligible chip-design start-ups, take minority equity without operational control, and exit after firms' scale. This is precisely the vote of confidence deep-tech founders need. Patient domestic risk capital can keep intellectual property, holding companies, and engineers in India instead of pushing them overseas in search of finance. Equity support should be matched by equity-linked employee rewards and expedited listing options. The Securities and Exchange Board of India and the exchanges should strengthen the Innovators Growth Platform into a fast, disclosure-rigorous route for qualified semiconductor and strategic deep-tech ventures. Chip-design firms face long development cycles, heavy R&D spending, and delayed revenues that conventional listing expectations do not always accommodate. Founders, employees, investors and policymakers need credible routes to liquidity. Without them, India may fund invention but lose ownership just before commercial scale. Foreign investment must similarly become embedded capability rather than an archipelago of facilities. The expansion of Applied Materials, AMD, Lam Research, KLA and Microchip, and the Tata Electronics-ASML partnership should move from investment to co-development, local supplier qualification, equipment servicing and selected sub-system assembly. These investments complement semiconductor partnerships with the US, the EU, Japan, Singapore, the Netherlands and Germany. India's design infrastructure already gives 105 start-ups and MSMEs access to advanced tools; its reach should grow ten-fold, with multi-project wafer access and university-industry research. Strategic procurement in telecom, defence, mobility and energy can give Indian chips their first customers. India is beginning its next chapter with factories, export lines, trained workers, supplier networks, anda record of execution. The smartphone changed India's export basket.The next decade must ensure that chipsand the AI they power changesomething more fundamental -who owns the technology and whocaptures the value. The smartphone was the proof of concept. The chip, and the intelligence it powers, is the larger industrial thesis....