Government Plans Domestic Chip Mandate for Smart Meters by Mid-2028

The government intends to mandate domestically designed chips in smart meters by mid-2028, Power Secretary Pankaj Agarwal said, citing cybersecurity risks in the power system. Speaking at the 2nd Indian Power Sector Conference organised by industry body FICCI, he said chip developers and meter manufacturers are already working on designs, with some chips in advanced stages of development.

"Some chips are already being designed or are in the process of design. They need to test those chips. And as and when they are able to validate their chips, they will go for the commercial production," Agarwal told reporters on the sidelines of the event, adding that the process would not take very long.

He expressed hope that by mid-2028 the government could mandate both "design in India" and "make in India" chips for the sector. A smart meter chip currently costs between $8 and $10 apiece. Agarwal said a Make in India requirement covering design-in-India and fabricated-in-India chips for smart meters has already been issued with the same timeline.

He maintained that no separate incentive is needed for domestically designed chips, as government procurement will provide an assured market. Beyond cybersecurity, the push could lower overall smart meter costs, since chip design accounts for a significant share of manufacturing expenses.

Under the Revamped Distribution Sector Scheme, smart metering works covering 19.79 crore consumers, 52.53 lakh distribution transformers and 2.05 lakh feeders — totalling 20.33 crore smart meters — have been sanctioned based on state and discom proposals. So far, 5.73 crore smart meters have been installed under the scheme, while 7.24 crore have been installed nationwide across all programmes.

Draft electricity policy with Cabinet

Agarwal also said the Ministry of Power has sent a note on the draft National Electricity Policy to the Union Cabinet for inter-ministerial consultation, after incorporating stakeholder comments. The policy will be finalised once that consultation concludes, and he indicated it should not take long. The draft was issued in January this year and will replace the 2005 policy.

The new framework is being designed around the demands of Viksit Bharat 2047, Agarwal said, noting that the challenges today differ sharply from those of two decades ago. With 300 gigawatts of non-fossil capacity already in place, grid management and transmission build-out have become significant tasks.

He said flexibility will be expected from both supply and demand sides, particularly large-load consumers such as data centres and green hydrogen producers. Describing them as gigawatt-scale groups that will inject fluctuations into the grid, he said they seek supply security and redundancy while expecting the system to absorb variability, and will be given flexibility mandates in return.

In July, the Power Ministry told Parliament that AI data centres would add 26.3 gigawatts of load by 2031-32, to be integrated into the grid and served primarily by renewable capacity. Cybersecurity has also drawn attention after a July data breach exposed information linked to the Kudankulam Nuclear Power Plant, and the Central Electricity Authority notified cybersecurity regulations to strengthen the resilience of power systems.