The United States' decision to ease restrictions on the export of Electronic Design Automation (EDA) software to China has introduced a fresh set of challenges and opportunities for India's burgeoning chipmaking industry. EDA software is crucial for designing complex chips and integrated circuits, and the move has triggered both concern and a call for accelerated domestic capabilities within India.
Background: The US-China Tech Trade and EDA Software
In May 2024, the U.S. government imposed a ban on the export of advanced EDA software to China, a move intended to limit China's access to technologies that could pose a risk to U.S. national security. This restriction impacted global design workflows and introduced instability in supply chains, as companies like Synopsys, Cadence, and Siemens EDA, which collectively command over 74% of the global EDA software market, had to halt their full engagement with Chinese entities. However, on July 3, 2025, the U.S. Department of Commerce's Bureau of Industry and Security granted formal clearance for the resumption of EDA software exports to China, signaling a potential thaw in U.S.-China tech trade tensions.
Impact on India's Chipmakers
The easing of EDA software restrictions presents a mixed bag for India. On one hand, the restoration of access to industry-standard tools for Chinese chipmakers could intensify competition in the global market. A more enabled Chinese chip industry can accelerate its research and development (R&D) and manufacturing, potentially impacting India's efforts to attract foreign investment and increase its market share, especially in areas like design and packaging. Ruchir Dixit, chairperson of the India Electronics & Semiconductor Association (IESA), noted that the strengthening capabilities of China's industry could create increased competitive dynamics for India's EDA sector and the wider electronics and semiconductor industry.
Conversely, some experts believe that the U.S. move could benefit India. Shankar Krishnamoorthy, chief product development officer at Synopsys, doesn't foresee similar software export restrictions being placed on India, especially given India's ambition to build its semiconductor ecosystem and the existing U.S.-India collaboration in the sector. The U.S. decision could also be seen as a signal to the global tech community that collaboration and openness are essential for continued innovation in semiconductor technology, further strengthening opportunities for VLSI professionals and chip design startups in India.
India's Response: Need for Speed and Self-Reliance
The U.S. decision has spurred calls for India to accelerate its domestic chip design capabilities. Kunal Chaudhary, partner and co-leader, Inbound Investment Group, EY India, emphasized the need for India to act swiftly, stating that "India must move faster on chip design. With the US easing EDA export restrictions for China, the global playing field is shifting". He also advocated for focused investment in R&D, intellectual property (IP), and deep skilling to build indigenous chip design software, viewing it as a strategic necessity for resilience and leadership in semiconductor innovation.
Kathir Thandavarayan, partner at Deloitte India, noted that the rescinding of EDA software restrictions would enable Chinese design entities to continue their efforts in advanced chip design, crucial for cutting-edge technology applications such as artificial intelligence (AI) and high-performance computing—areas of importance for India as well.
The Way Forward
The U.S. easing of EDA software restrictions on China presents both challenges and opportunities for India's semiconductor industry. While increased competition from a more enabled Chinese chip industry is a concern, it also underscores the importance for India to accelerate its efforts in developing domestic chip design capabilities. This includes:
By taking these steps, India can navigate the challenges posed by the evolving global landscape and strengthen its position as a key player in the semiconductor industry.
