India's semiconductor sector stands on the cusp of a profound transformation, evolving from a USD 50 billion market heavily reliant on imports to a robust, self-reliant ecosystem valued at USD 300 billion by 2035, as outlined in a comprehensive report by Deloitte.

Currently, the sector grapples with significant import dependence, sourcing over 90 per cent of its semiconductor needs from global supply chains. This vulnerability underscores the urgency for domestic capacity building.

Projections indicate explosive growth, with the market expected to surge to USD 120 billion by 2030, up from USD 45-50 billion in FY2024-25. By 2035, it will reach USD 300 billion, propelled by key drivers such as artificial intelligence, automotive applications, data centres, and electronics manufacturing.

Strategic initiatives aim to slash import dependency dramatically. By 2030, India anticipates reducing reliance on imported semiconductors and components by at least 40 percentage points through ecosystem-led capacity expansion and heightened localisation in critical segments.

Looking further ahead to 2035, domestic production is forecasted to satisfy around 60 per cent of the nation's semiconductor demand, marking a pivotal shift towards self-sufficiency.

To realise this vision, India plans to establish substantial manufacturing infrastructure by 2035, including 4-5 silicon fabrication units, 8-10 compound fabs, 1-2 display fabs, and 20-25 outsourced semiconductor assembly and test (OSAT) facilities.

These ambitions receive strong governmental backing through the India Semiconductor Mission (ISM) and incentives offered by various states, fostering an enabling environment for investment and innovation.

Demand patterns for semiconductors in India are set to evolve markedly. By 2035, mobile devices, automotive sectors, computing, and data centres will collectively account for more than 70 per cent of total demand.

High-growth domains will play a starring role. Electric vehicles (EVs), advanced driver-assistance systems (ADAS), AI workloads, and high-performance computing (HPC) are poised to reshape consumption trends and accelerate sector expansion.

The data centre industry exemplifies this momentum, having attracted approximately USD 60 billion in investments between 2019 and 2024, with USD 19 billion pouring in during 2024 alone. Further inflows of USD 45 billion are anticipated between 2025 and 2027, fuelled by AI adoption, cloud infrastructure growth, and favourable policies.

In the automotive realm, EV penetration is projected to leap from 7.8 per cent to 30 per cent by 2030, climbing beyond 60 per cent by 2035. This surge will substantially elevate semiconductor requirements for batteries, power electronics, and connected systems.

Beyond core fabrication, the burgeoning ecosystem will draw investments into ancillary industries. These include substrate manufacturing, speciality gases, high-purity chemicals, cleanroom infrastructure, and advanced semiconductor manufacturing equipment.

Collectively, these developments signal India's trajectory towards a comprehensive semiconductor ecosystem. The nation is methodically addressing import vulnerabilities, bolstering domestic capabilities, and carving a stronger niche in the global value chain over the next decade.

This transformation not only promises economic gains through job creation and technological sovereignty but also positions India as a competitive player amid intensifying geopolitical tensions over semiconductor supply chains.

ANI