India's semiconductor market is on track to reach approximately $200 billion by 2035, according to a report from NITI Aayog. This projection underscores a critical juncture for the nation, as nearly 90-95% of its current semiconductor demand is met through imports, leading to significant foreign exchange outflows and heightened vulnerability to global supply chain disruptions. The ongoing geopolitical tensions and the recent West Asia conflict have only amplified these concerns, making self-sufficiency in semiconductors more pressing than ever.
To build a robust domestic semiconductor ecosystem, the report suggests that India will require cumulative investments ranging from $135 billion to $180 billion over the next decade. This investment is essential not just for fabrication and design but also for advanced packaging and supporting infrastructure. The government is urged to commit at least one-third of this amount to de-risk projects and instill long-term investor confidence.
Moreover, the report advocates for a strategic shift in India's approach to semiconductor production. Instead of merely participating in the global race, India should define its own pathway, focusing on self-sufficiency and ecosystem strength. This entails prioritizing public funding for critical areas such as Fabs and advanced packaging while leveraging India's existing strengths in design talent and engineering capabilities.
