The report highlights the growing scale of India’s semiconductor demand and the need to strengthen domestic capabilities across manufacturing, innovation and the wider supply chain. Consumer electronics is currently the largest demand driver, accounting for 30% of India’s semiconductor market, followed by automotive at 16% and industrial applications at 15%.
AI, data centres, telecommunications, electric mobility and advanced manufacturing are also creating new growth avenues for the semiconductor industry. At the same time, semiconductor imports increased more than fivefold from USD 5.7 billion in FY17 to USD 30.3 billion in FY25, representing a CAGR of 23%. The rise in imports highlights the opportunity to translate expanding domestic demand into local manufacturing and innovation.
India also accounts for nearly 20% of the world’s chip design engineers, providing a significant talent base to scale semiconductor manufacturing, indigenous design and commercialisation.
Ashok Chandak, President, India Electronics and Semiconductor Association (IESA), said, “India now has a unique opportunity to combine its strengths in engineering talent, electronics demand, design capabilities and emerging manufacturing capacity with resilient global supply-chain partnerships. The next phase will be defined by execution, innovation, technology commercialisation, indigenous IP, specialised talent and ecosystem depth. India has moved beyond semiconductor ambition. The opportunity now is to build an ecosystem that the world trusts, India owns and the next generation can scale.”
Aisha Ali Hussaini, Partner and Semiconductor Tax Leader, EY India, said, “India has a powerful combination of market scale, engineering talent and policy momentum. Its rapidly expanding electronics ecosystem adds to this opportunity; electronics production increased sixfold from INR1.9 lakh crore in FY15 to INR11.3 lakh crore in FY25, while electronics manufacturing and exports grew sevenfold and elevenfold, respectively, over the same period. The priority now is to translate this scale into deeper semiconductor value addition by building a connected, innovation-led ecosystem that attracts sustained investment and creates more value domestically. Over the coming decade, a predictable fiscal and regulatory environment, stronger alignment between central and state policies, and focused support for emerging technologies can help improve project viability and accelerate commercialisation. If industry, government and academia work together with a long-term view, India can move beyond being a design powerhouse to play a much larger role across manufacturing, advanced packaging and the wider global semiconductor value chain.”
India has already made significant progress in building its semiconductor ecosystem and is positioned to build on this momentum. According to the EY–IESA report, the next phase should focus on strengthening and aligning state semiconductor policies with the broader scope of Semicon 2.0, developing integrated semiconductor manufacturing clusters supported by shared, world-class infrastructure, and introducing dedicated talent-certification programmes covering semiconductor design, fabrication and advanced packaging.
As global semiconductor value chains are reshaped by diversification and technology transitions, the EY–IESA report identifies advanced packaging, compound semiconductors, photonics and chip-to-system integration as high-potential opportunity areas for India. These segments can build on the country’s design capabilities, growing electronics and AI demand, and emerging manufacturing base to expand its presence in technology-intensive parts of the value chain.
Capturing these opportunities will require coordinated action. Investors will assess policy certainty, cluster readiness and speed of implementation, while industry will need deeper partnerships with suppliers, academic institutions and technology owners to localise capabilities. Policymakers will also need to streamline approvals and sustain long-term support for research, talent and supplier development.
The projected growth from nearly USD 64 billion in 2026 to USD 200 billion by 2035, alongside rising semiconductor imports and India’s established chip-design talent base, places greater focus on converting domestic market demand into manufacturing, innovation and broader participation across the global semiconductor value chain.
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