The first part of the series 'Modinomics' described foundations and factories; this one is about frontiers - the two bets that will shape India's economic standing in the 2030s. One is physical and capital-hungry: semiconductors. The other is diplomatic and decades in the making: a wave of free-trade agreements that has, almost overnight, opened the developed world to Indian exporters. On both, the Modi government has moved from talk to execution within this term, and that shift is the story.
Let's begin with chips, because it is the harder bet. For decades India consumed semiconductors and made none. Under the India Semiconductor Mission, launched in December 2021 with a Rs 76,000 crore corpus and an unusually generous structure - up to 50 per cent central plus 25 per cent state subsidy, covering as much as 75 per cent of fab cost - ten projects have now been approved across six states, drawing cumulative investment of roughly Rs 1.6 lakh crore. Micron's assembly-and-test facility at Sanand is the first operational plant of the cycle. Tata Electronics' fab at Dholera, in partnership with Taiwan's PSMC and built on a Rs 91,000 crore investment, targets first silicon by late 2026. The government's stated roadmap of four plants operational by end-2026 aspires to put India among the world's top five chip ecosystems by 2029.
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Of course, there are many moving parts for this aspiration to fulfill. India's first true fabrication unit is not expected until 2028. Today's milestones are mostly in assembly, testing and packaging, the lower-margin end of the chain. Fabs are ruinously water-, power- and capital-intensive, and timelines in this industry slip everywhere, not only in India. Yet the fact that global semiconductor supply chains are actively diversifying away from the China-Taiwan axis puts India in a unique spot. As US-China decoupling pushes design and packaging capacity outward, India offers English-speaking engineering talent and aggressive sops to tap into this geo-economic tailwind. Qualcomm's recent 2nm design work routed through India suggests the global industry is treating the bet as real.
If the proposed timelines hold, the payoff is transformational: India would shed one of its costliest strategic dependencies, plugging a chronic import bill that runs into tens of billions of dollars a year and insulating everything from defence systems to automobiles against the next global chip shortage. More than that, a working fab ecosystem would anchor the high-value end of the electronics chain on Indian soil - the very layer that, as the first column noted, still escapes a manufacturing base built largely on assembly.
The trade story is where the government can claim its cleanest win. After years in which India was caricatured as protectionist and FTA-shy, the last twenty-four months have been transformational. The India-UK CETA was signed in July 2025, projected to lift bilateral trade by $34 billion annually. The India-EFTA partnership entered into force in October 2025, carrying an unprecedented $100 billion investment pledge over fifteen years. And in January 2026 came the headline act: the India-EU FTA, concluded after nearly two decades of negotiation. Termed the 'mother of all trade deals', the pact covers 2 billion consumers and is the largest deal the EU has ever struck. Add Oman, New Zealand, and an interim framework with the United States in February 2026, and India now has FTAs spanning dozens of countries, with the entire European market effectively opened to Indian exporters.
This is consequential in a way that compounds the previous column. The manufacturing capacity built under PLI needs markets; the FTAs supply them. The semiconductor and electronics ecosystem needs investment and technology partners; EFTA's capital pledge and the EU's defence-and-technology partnership supply those. The pieces are designed to fit.
FTAs cut both ways - they expose Indian producers to competition as much as they open foreign shelves, and the gains will accrue unevenly across sectors. The US framework is interim, struck under the shadow of tariff pressure, and far from settled.
Taken together, silicon and signatures could redraw the very complexion of the Indian economy - turning a domestic-demand story into an export-and-technology powerhouse plugged into the world's most lucrative markets. Get both right, and India stops being merely the fastest-growing major economy and becomes an indispensable node in the global supply chain - and that is what real economic power looks like.
(You can read the first part of the series here. The third part will be released on June 10.)
