Last Updated:July 13, 2025, 10:15 IST

The US lifting EDA software sales restrictions to China challenges Indian chipmakers. Experts urge India to speed up chip design efforts to remain competitive.

Indian chipmakers look ahead tough times and stiff competition at the global front after United States has lifted the restriction on the sale of Electronic Design Automation (EDA) software to China by US companies.

The lifting of the restrictions will allow the US-headquartered EDA companies including Cadence Design Systems, Siemens EDA and Synopsys to resume the business engagement in China. Eventually, it would harm the interest of India chipmaker firms who are prying to gain the big pie as soon as possible. 

The Trump administration had put the restrictions on US’ EDA companies as part of its overall strategy to halt the access of advanced technologies to Chinses firms, especially those critical to semiconductor and defense industries.

Ruchir Dixit, chairperson of the India Electronics & Semiconductor Association (IESA) board of directors, told ET that “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.”

He also added that “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.”

With the lifting of software restrictions, companies reassessing their ‘China Plus One’ strategy should carefully consider the timing of their investments in India for EDA development or other functions, according to Dixit.

Shankar Krishnamoorthy, chief product development officer at Synopsys as quoted by ET report, stated that the company does not expect software export restrictions previously placed on China to be imposed on India, especially given India’s goal to develop its semiconductor ecosystem and the ongoing US-India collaboration in the sector.

Biswajeet Mahapatra, principal analyst at Forrester, noted that this signals increased competition. A more capable Chinese chip industry, with renewed access to critical design software, could accelerate its R&D and manufacturing, potentially intensifying the race for global market share and foreign investment, particularly in design and packaging, areas where India is also making significant progress.

Kunal Chaudhary, partner and co-leader of the Inbound Investment Group at EY India told ET the urgency for India to act quickly. “India must accelerate its chip design efforts. With the US easing EDA export restrictions for China, the global playing field is shifting,” he said.

Chaudhary emphasized that developing India’s own chip design software is a strategic necessity, not just for resilience but to lead in the next era of semiconductor innovation. He called for focused investment in R&D, intellectual property (IP), and deep skilling.

India’s Semiconductor Push Amid Global Headwinds

India is aggressively pushing to become a global semiconductor hub with a Rs 76,000 crore incentive scheme under the Semiconductor India Programme. The government aims to boost domestic capabilities across chip manufacturing, packaging (ATMP/OSAT), and design. Big players like Micron have already committed to setting up chip assembly plants in Gujarat, while Tata Group is also exploring fabrication projects. With global firms looking to diversify away from China, India is positioning itself as a strong alternative through policy support, subsidies, and fast-track approvals.

While India already has a strong chip design talent base, the challenge lies in setting up full-scale fabs, which require high capital, cutting-edge technology, and steady infrastructure. The government has also launched the India Semiconductor Mission to coordinate efforts and support startups in chip design and EDA tools access. With sustained investment, IP development, and skilling, India aims to reduce import dependence and become a competitive player in the global semiconductor race.

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