India is “no longer a laggard” in frontier technologies, and investments are being made to establish domestic semiconductor manufacturing capabilities, Finance Minister Nirmala Sitharaman said in an interview with CNBC on the sidelines of the International Monetary Fund (IMF) and World Bank annual meetings in Bangkok.

Sitharaman’s remarks come amid a global shift in investment towards artificial intelligence (AI) and markets with a strong presence in the semiconductor industry. In the interview, she said India had not received the same scale of AI-related investments as some other jurisdictions, but maintained that the country was making progress in frontier technologies.

At the same time, she said India would not be “hurt” by spillovers if the global AI bubble burst.

On October 13, speaking at the Bloomberg New Economy Forum in India, Sitharaman said the country was looking to attract more capital into AI, semiconductors and clean energy as global investors increasingly directed funds towards the US and frontier AI.

Addressing concerns about India’s semiconductor ambitions at the event, she rejected suggestions that the country’s plans were unrealistic and said the government had consciously decided to pursue opportunities beyond the most advanced chips.

She said India was also focusing on semiconductors used in everyday applications, including refrigerators, cars and connected household devices. This approach seeks to build capabilities across different parts of the semiconductor value chain rather than focus exclusively on the most technologically advanced segments.

Sitharaman identified semiconductor manufacturing and design, chip testing and packaging, renewable energy, green hydrogen, green ammonia and electric vehicles as areas that could attract investment.

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