India wants to become a semiconductor powerhouse, but it can’t do it alone.

India, the world’s fifth-largest economy, is pushing for self-reliance in manufacturing and has big ambitions to become a semiconductor powerhouse.

Indian Prime Minister Narendra Modi has set numerous goals to advance the country’s semiconductor sector, with the latest and biggest being to grow the country’s electronics sector from the current $155 billion to $500 billion by 2030.

The announcement has attracted attention, and industry experts who spoke to CNBC have conflicting views on whether the goal is realistic, but they all agree on one thing: India cannot achieve this goal alone.

“Despite the rapid pace of development and the apparent momentum, India has only just started developing its semiconductor industry from scratch,” said Eri Ikeda, assistant professor at the School of Management at the Indian Institute of Technology Delhi.

Taiwan is currently the world’s largest semiconductor manufacturer, accounting for about 44% of the global market share, according to data from Taiwanese consultancy Trendforce, followed by China (28%), South Korea (12%), the United States (6%) and Japan (2%).

Bhatnagar noted that Taiwan’s Powerchip Semiconductor Manufacturing Corp. is helping India’s Tata Electronics set up India’s first 12-inch wafer fab in Gujarat. Micron Technology India plans to produce its first semiconductor chips in 2025. Last week, a US semiconductor manufacturer Analog Devices The Tata Group has signed an agreement to explore manufacturing semiconductor products in India. These examples show the need for collaboration, he explained.

India is increasingly being seen as a viable alternative to China for companies looking to diversify their supply chains amid geopolitical risks, but analysts say the country needs guidance first before it can compete with East Asian powers, especially since its chip-making industry is still in its very early stages.

China regained its position as India’s largest trading partner in FY24, with bilateral trade between the two countries reaching $118.4 billion. India’s imports of telecom equipment and smartphone components from China reached $4.2 billion, according to data from the Ministry of External Affairs.

“India is way behind China in semiconductor manufacturing. India can run fast and catch up, but China will run faster,” said Rishi Bhatnagar, chairman of the Society of Engineering and Technology’s Future Technologies Committee, adding that cooperation rather than competition between the two countries was paramount.

“Even in China, TSMC “China wants to build and expand its semiconductor industry by importing large amounts of equipment from the United States and Japan,” Ikeda said in an interview with CNBC.

While India will still need to rely heavily on Taiwan and China, two of the big chip makers, it plans to continue working with the US to counter China, industry experts told CNBC.

Earlier in September, the US State Department announced it would partner with the India Semiconductor Mission and India’s government electronics and IT agency to improve the global semiconductor value chain.

This comes just three days before the Biden administration introduces new export controls on critical technologies such as quantum computing and semiconductor products, measures that are likely to limit Beijing’s advances in AI and computing.

For the United States, India could help diversify its semiconductor supplies and reduce reliance on Taiwan, Bhatnagar said.

“They are investing in a democratically elected country where there is a legal framework, where there is a growing English speaking population. So it’s a very different kind of discussion between two democracies. And we need to accept and agree that this is necessary at a time when the global situation is changing,” Bhatnagar said.

Earlier this week, Prime Minister Modi NVIDIAWith Jensen Huang GoogleOther tech CEOs, including Sundar Pichai of Huawei Technologies, were in New York for a roundtable discussion after attending the annual Quad meeting. “Now is India’s time,” Huang said, pledging to work with India, according to the Hindustan Times. AmLisa Su from also attended.

Other analysts say India’s focus on semiconductors will boost the US’s position in the ongoing “semiconductor war” with China, ultimately helping India.

“India is ready to leverage investment from the United States and even China for industrial development, which, if successful, could become a competitor to India,” Ikeda said.

Still, she added, there are many hurdles before India can truly compete with China in semiconductors, especially in terms of infrastructure and investment.

“We are very encouraging the semiconductor industry. We have started building the ecosystem, which is essential before we can have more foundries come into the country to actually make chips,” India’s Commerce and Industry Minister Piyush Goyal said in an interview with CNBC’s Tanvir Gill.

India still has a long way to go before it can become a semiconductor powerhouse, but there are many advantages working in its favour.

For example, India’s low labor costs make it an attractive destination for companies looking to diversify parts of their supply chains away from China.

The monthly minimum wage for a skilled worker in New Delhi is 21,215 Indian rupees ($253.85), while a worker in Beijing earns 2,420 yuan ($344.30) during the same period. Minimum wages in each country vary by state and province.

“If India can become more technologically advanced and meet global demand with cheaper and more fair-quality products, it will have a competitive advantage over China,” Ikeda said.

The world’s most populous country is expected to become the world’s second-largest economy by 2075, according to Goldman Sachs, and has already attracted investors from tech giants such as Apple and Google, who analysts predict will further ramp up production in India.

“Apple already exports more from India than it sells in the country, with a large domestic market and a young country giving it an advantage,” said Tarun Pathak, research director at Counterpoint Research.

This optimistic outlook is expected to be further borne out over the next decade as the country continues to make significant progress in connecting and modernizing its highways, rail and airports.

In her interim budget in February, Finance Minister Nirmala Sitharaman projected capital spending to rise 11.1% to 11.11 trillion rupees ($133.9 billion) in fiscal 2025, mainly focused on rail and airport construction.

“The semiconductor industry does not require so many large ships or cargo. Chips are small products and can be shipped in large quantities by air,” Bhatnagar said.

Demand for chips is only set to grow, and India could be a solution for many companies looking to cut costs and meet demand.

“We’re not going to bet on India. There are very few places around the world that have the right infrastructure, economy, stability and workforce to actually achieve this goal,” said Sameer Kapadia, CEO of India Index and managing principal at Vogel Group.