Indian private sector corporations were excluded from the sanctions regime.
Until a couple years ago (like 2015 or 2016 I think), all Indian defense manufacturing and R&D was done by PSUs like Hindustan Aeronautics Limited, Bharat Electronics Limited, Armoured Vehicles Nigam Limited, etc
> Pentium chips were denied even as late as 90s
For Nuclear Non-Proliferation reasons, which was done by the Indian public sector.
India straight up didn't have a private sector MIC until the 2010s.
> India is still on US entity list restriction
It's public sector units, not the private sector players like Tata who have work with companies like Lockheed Martin and Boeing for over 20 years.
> Indian companies hardly invest in R&D ... Indian companies, and general public, have very little risk appetite
It's because of the financials. India allows 100% foreign ownership in R&D FDI, so there's no reason for Tata Electronics to try and build a local chip design R&D arm when Nvidia and Intel have massive R&D labs in Bangalore and Hyderabad that have been chugging along since the 2000s and can pay salaries in USD.
There is some incipient work on making indigenous RISC-V architecture chips, but it looks like bullshit to me.