India’s Semiconductor Surge: $200 Billion by 2035

According to a fresh report from EY and the India Electronics and Semiconductor Association (IESA), the country’s semiconductor industry is on track to balloon from roughly $64 billion in 2026 to about $200 billion by 2035. That’s more than a three‑fold jump in less than a decade, and it comes with a clear message: India can no longer rely on foreign‑made chips alone.

The study, titled “Semicon India 2.0: From capacity creation to ecosystem leadership,” points to three main pillars driving the surge. First, consumer electronics still dominate, accounting for about 30 % of chip demand. Close behind are automotive applications (≈16 %) and industrial uses (≈15 %). Then there are the fast‑growing niches – artificial intelligence, data‑centre workloads, 5G‑plus telecom, electric mobility and advanced manufacturing – all of which are opening fresh avenues for chip sales.

India’s appetite for semiconductors is already evident in the import data. Between fiscal 2017 and 2025, chip imports exploded from $5.7 billion to $30.3 billion, a compound annual growth rate of roughly 23 %. The report warns that this runaway import trend is a double‑edged sword: it signals huge domestic demand, but also leaves the supply chain vulnerable to external shocks.

What makes the Indian case compelling isn’t just market size. The nation boasts roughly 20 % of the world’s chip‑design engineers, a talent pool that can power both design and fabrication domestically. Ashok Chandak, president of IESA, summed it up nicely: “India now has a unique opportunity to blend engineering talent, massive electronics demand and emerging manufacturing capacity into a resilient, globally trusted ecosystem.” He added that the next decade will be judged by how well the country can execute, innovate and commercialise indigenous IP.

On the manufacturing front, the broader electronics sector has already shown the kind of scale that can support a thriving chip industry. Total electronics output jumped six‑fold from Rs 1.9 lakh crore in FY15 to Rs 11.3 lakh crore in FY25, with domestic production rising seven‑fold and exports soaring eleven‑fold over the same period.

Aisha Ali Hussaini, EY’s semiconductor tax lead, emphasized that policy momentum is finally catching up with market realities. “We have the scale, the talent and the policy backing,” she said. “The challenge now is to turn that scale into deeper value addition – building an innovation‑led ecosystem that draws sustained investment and keeps more of the value chain at home.”

Looking ahead, the EY‑IESA report flags several high‑potential segments: advanced packaging, compound semiconductors, photonics and chip‑to‑system integration. It recommends that state governments harmonise their semiconductor policies with the national “Semicon 2.0” roadmap, create shared‑infrastructure manufacturing clusters, and roll out specialised certification programmes for designers, fab engineers and packaging experts.

If regulators, industry players and academia can align on a long‑term vision, India could move beyond being a design powerhouse to become a key player in manufacturing, advanced packaging and the wider global chip value chain. The next ten years, according to the report, will be decisive – not just for revenue, but for building a semiconductor ecosystem the world can rely on.