A semiconductor is a material that is used in electronic equipment and devices to manage and control the flow of electricity. The collective of businesses involved in the design and production of semiconductors and semiconductor devices, such as transistors and integrated circuits, makes up the semiconductor industry. it was founded around 1960. Now the manufacture of semiconductor devices became a profitable industry. The semiconductor industry is a hugely important sector for world economies. The paper is divided into five parts. The first part underlines the importance of trade policies and technology transfer agreements, and offers examples of their utilization by states to build industrial capacity. In the second section, the paper delves further into India’s semiconductor industry and its comparative advantages. An overview of recent policy announcements follows, as well as an examination of why the approach might not suffice in the long run. The fourth section highlights the challenges and barriers facing India when formulating favourable trade and technology transfer policies. The paper ends with policy recommendations