Experts have warned that India must quickly scale up its domestic chip design capabilities, especially as China strengthens its semiconductor industry. The warning comes after the United States decided to lift restrictions on the export of Electronic Design Automation (EDA) software to Chinese companies.
The change in policy, which reverses earlier curbs introduced under former President Donald Trump, allows top American EDA firms—Cadence Design Systems, Siemens EDA, and Synopsys—to fully resume operations with Chinese entities.
“The strengthening capabilities of China’s industry could create increased competitive dynamics, not only for India’s EDA sector but also across the wider electronics and semiconductor industry,” said Ruchir Dixit, chairperson of the India Electronics & Semiconductor Association (IESA). He added, “Until a few months ago, nobody thought of software as a supply chain problem. Now, with this action, the supply chain includes software as well. It includes anything that enables creation and employment in India.”
When asked if this shift could impact the ‘China Plus One’ strategy, Dixit mentioned that companies looking at India for EDA or related areas might reconsider their investment timelines.
Meanwhile, Shankar Krishnamoorthy, chief product development officer at Synopsys, said the company does not expect similar restrictions to apply to India, citing the country’s growing ties with the US and its semiconductor ambitions.
However, Biswajeet Mahapatra, principal analyst at Forrester, noted that China’s renewed access to key design software could help speed up its R&D and manufacturing, increasing global competition for market share and foreign investments—especially in design and packaging, areas where India is also progressing.
Kunal Chaudhary, partner and co-leader of EY India’s Inbound Investment Group, said India must act fast. “India must move faster on chip design. With the US easing EDA export restrictions for China, the global playing field is shifting,” he warned. Chaudhary also called for greater investment in R&D, intellectual property, and advanced skills to ensure India’s leadership in semiconductor innovation.
Kathir Thandavarayan, partner at Deloitte India, said lifting restrictions will help Chinese companies move forward with advanced chip designs, important for technologies like AI and high-performance computing. He explained that while India is currently focused on mature nodes that serve 75–80% of global demand, it is also working towards building a full semiconductor value chain. The country already contributes 20% of the world’s semiconductor design engineers and plays an important role in advanced node designs.
Jaswinder Ahuja, former managing director of Cadence India, said the short-term impact on Indian firms may be limited, but the move “raises questions about potential future restrictions on India.” He also highlighted opportunities for startups in AI, chiplets, and 3D-IC packaging. “These startups, unencumbered by legacy constraints, can reimagine design approaches and drive innovation,” he said.
Dixit pointed out that no EDA firms are currently benefiting under the government’s Design-Linked Incentive (DLI) scheme. “They are all design companies, people who will make or design some silicon or some printed circuit board (PCB) that will go into a system using EDA,” he said. He explained that the dominance of big firms like Siemens, Cadence, and Synopsys makes it hard for smaller players to tackle complex problems with limited resources.
While the US decision may bring short-term stability to global tech trade, experts believe this is the right time for India to double down on building its domestic capabilities and secure its place in the global semiconductor race.
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