India’s Semiconductor Ambitions Rise with $120B Consumption Outlook

Key Takeaways

1. India’s semiconductor demand is set to reach $120B by 2030.
2. The government launched the India Semiconductor Mission to boost local manufacturing.
3. Challenges include high costs, tech gaps, and global competition.
4. Investments and partnerships aim to build a strong domestic ecosystem.
   

Semiconductors are the tiny chips that power almost everything we use today, from smartphones and laptops to cars and even home appliances. In India, the demand for these chips is growing faster than ever. Experts estimate that our country could consume nearly $120 billion worth of semiconductors in the coming years. That is a huge number, and it shows how much technology is becoming a part of our daily lives.

We often rely on imports for most of these chips, which makes our industries vulnerable when global supply chains face disruptions. But now, India is taking steps to change that. The government is pushing for local manufacturing, offering incentives to attract global players, and encouraging startups to innovate in chip design.

Let’s explore why semiconductors are so important for India, what is driving this massive demand, and how the country plans to become a significant player in the global semiconductor market. We will also look at the challenges ahead and the opportunities that come with them.

Current Semiconductor Landscape in India

India’s semiconductor industry has traditionally relied heavily on imports, with limited domestic production. In 2024, the country’s semiconductor market was valued at around $45-50 billion, largely driven by consumer electronics, automotive components, and communication devices. Despite this demand, India has historically lacked the infrastructure and technological expertise to manufacture semiconductors at scale, making it dependent on other countries for these critical components.

Recent developments, however, indicate a shift. The government launched the India Semiconductor Mission (ISM) in December 2021 to create a full semiconductor ecosystem, covering design, fabrication, assembly, testing, and packaging. In August 2025, ten semiconductor manufacturing projects were approved under the ISM, with total investments of around INR 1.60 trillion (US$18.23 billion).

Setting up semiconductor fabrication plants requires huge capital and advanced technology, which are still emerging in India. The country also faces stiff competition from global leaders like Taiwan, South Korea, and the US. Yet, with focused initiatives and growing expertise, India is steadily moving toward a stronger position in the global semiconductor market.

Drivers of Rising Semiconductor Demand

The growing demand for semiconductors in India comes from multiple sectors. Consumer electronics, such as smartphones, laptops, and IoT devices, continue to expand, driving chip consumption. At the same time, the automotive industry is evolving rapidly, with electric vehicles and advanced driver-assistance systems relying heavily on semiconductors for battery management, infotainment, and safety systems.

Telecommunications, especially the rollout of 5G networks, is another major driver. High-performance chips are essential to support faster, more reliable communication. Additionally, the rise of artificial intelligence and large-scale data centers requires specialized semiconductors capable of handling complex computations. Together, these factors show how semiconductors have become central to India’s technology growth.

India’s Government Push and Strategic Initiatives

The Indian government has taken several steps to strengthen domestic semiconductor capabilities. The India Semiconductor Mission (ISM) aims to develop a complete semiconductor ecosystem, including fabs, assembly units, and design centers, reducing import dependence and fostering local innovation.

Financial incentives, such as the Production-Linked Incentive (PLI) scheme, encourage both domestic and foreign companies to invest in semiconductor manufacturing. Infrastructure development, including Electronics Manufacturing Clusters (EMCs) and support for fabrication plants, is helping create a business-friendly environment.

India is also exploring international partnerships to gain technology and expertise. Collaborations with countries like Japan and South Korea are intended to enhance skill development and support technology transfer. These initiatives reflect India’s commitment to becoming a meaningful player in the global semiconductor space.

Challenges and Roadblocks

Despite these positive steps, several challenges remain. Semiconductor fabs require enormous capital, which can discourage investors. The technology itself is complex, and India is still developing the expertise needed to operate at scale.

The country also relies on imports for critical raw materials and equipment. Building a self-sustaining supply chain is essential to ensure uninterrupted production. Moreover, established semiconductor hubs like Taiwan and South Korea continue to dominate, offering better infrastructure, a skilled workforce, and experience. Overcoming these obstacles requires sustained effort from the government, industry, and educational institutions.

Opportunities for India

India’s push into semiconductors offers significant opportunities. Developing a domestic industry can generate jobs, attract investment, and foster innovation. Reducing import dependence also strengthens national security and stabilizes supply chains for critical industries.

Establishing India as a semiconductor hub would improve its position in the global technology landscape and encourage international partnerships. It would also accelerate advancements in sectors like automotive, telecommunications, healthcare, and defense, contributing to broader economic and technological growth. With continued investment in infrastructure, skills, and collaborations, India is well-positioned to emerge as a key player in the global semiconductor industry.

Bottom Line

India is moving fast from a chip importer to a global semiconductor player. With $120 billion in projected demand, skilled engineers, and projects under the India Semiconductor Mission, the country is building a strong ecosystem. Strategic investments and international partnerships position India to compete globally while reducing import dependence.

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Disclaimer:

This is for informational purposes only and does not constitute financial advice. Always do your research.