India's Semicon Market to Reach $300 Bn by 2035: Report

India's semiconductor market is projected to nearly triple to $120 billion by 2030 and reach $300 billion by 2035, driven by the exponential adoption of artificial intelligence (AI), automotive growth, and data centre expansion, according to a report by Deloitte.

India, which currently imports over 90% of its semiconductor needs, is poised for a structural shift as local production is expected to meet more than 60% of domestic demand by the end of 2035, the report titled 'Technology, Media, and Telecommunications Predictions 2026' said.

"India's semiconductor market is estimated at $45–50 billion in FY2024–25 and has been growing at a CAGR of 20% over the past three years. The market is predicted to reach $120 billion by 2030 and $300 billion by 2035, driven by AI, automotives, data centres, and electronics manufacturing.

"By 2035, India is expected to host 4–5 silicon fabs, 8–10 compound fabs, 1–2 display fabs and 20–25 OSAT facilities, supported by ISM and state-level incentives," the report said, adding that by 2035, 60% of the country's domestic semiconductor demand is expected to be met through local production.

By 2035, various segments, such as mobile phones, automotive, computing, and data centres, are expected to account for more than 70% of the total semiconductor demand in the country.

Supported by the government's India Semiconductor Mission (ISM), the sector has already attracted over $19 billion in manufacturing investments across 10 approved projects, which include eight Outsourced Semiconductor Assembly and Test (OSAT) facilities, one compound fab, and one semiconductor fab.

Another 18-20 proposals with a total investment of $20-25 billion are currently in the pipeline at various stages, Deloitte pointed out.

"Over the next five years, the semiconductor industry in India is predicted to attract an additional $50 billion in capital investment," the report stated, adding that another $75-80 billion investment is expected between 2030 and 2035 that will enable ecosystem expansion.

The expansion of the semiconductor ecosystem will also trigger massive job creation. The industry is forecast to provide approximately 2 million employment opportunities by 2035. Of this, about 30% will be in manufacturing operations, 30% in design services, and the remaining 40% across the rest of the value chain.

To support this scale-up, the sector will need to train 4,00,000 to 5,00,000 people annually through relevant courses, fab and ATMP labs, and training facilities, the report said.

However, Deloitte cautioned that sustaining this momentum will depend heavily on execution.

The report recommended that the policy environment must evolve from a time-bound incentive scheme into a structurally embedded national program to ensure funding certainty beyond annual budget cycles.

It also stressed the need for improved coordination between the Centre and states to implement a single-window execution framework for land, utilities, and infrastructure delivery.