NEW DELHI, May 29: India should target building a USD 120-150 billion semiconductor value chain by choosing leadership and purpose over participation by 2035, a NITI Aayog report said on Friday.
The Centre should commit at least one-third of the required investment to de-risk projects and anchor long-term investor confidence, the report, ‘Future of India’s Semiconductor Industry’, suggested.
Instead of chasing the global wafer race from behind, India should define its own pathway-one that is not only distinct but shaped by strategic self-sufficiency, ecosystem strength and global indispensability, the report said.
“By 2035, India should target building a USD 120-150 billion semiconductor value chain by choosing leadership and purpose over participation,” the report said.
According to the report, building a globally competitive semiconductor ecosystem in India will require nearly USD 135-180 billion in cumulative semiconductor investments over the next decade, directed toward growth capital across design, fabrication, advanced packaging, materials and supporting infrastructure.
“The government of India should commit at least one-third of the required investment to de-risk projects and anchor long-term investor confidence,” it said.
This, the report said in turn, can crowd in private capital at scale. Fabs, advanced packaging, compound semiconductors and critical design infrastructure should be prioritised for public funding.
“Alongside funding support, the focus should also be on stability, predictable incentives and coordinated execution across the value chain,” it said.
According to the report, the country’s semiconductor market is projected to reach around USD 200 billion by 2035.
However, despite the growing domestic demand, nearly 90-95 per cent of this demand is currently met through imports, leading to large foreign exchange outflows and increasing the vulnerability of critical sectors to supply-chain disruptions, it pointed out.
“This widening gap between demand growth and limited domestic capability represents a critical strategic vulnerability and yet also a historic opportunity,” the report said.
NITI Aayog Vice Chairman Ashok Kumar Lahiri in his message said one of the biggest strategic risks to Viksit Bharat is a growing dependence on imported black-box technologies.
“For India to become a developed nation, technological sovereignty is foundational. And that sovereignty must begin at the infrastructure layer.
“Semiconductors sit at the heart of this foundation, powering everything from AI, defence and manufacturing to mobility, energy systems, communications and citizen services,” Lahiri added.
The report noted that the global semiconductor supply chain is highly specialised, with a clear division of activities among a handful of countries depending upon their respective strengths. For years, it said original design manufacturers (ODMs) headquartered in the US—known for their design expertise—have developed design architectures in line with both local and global demand and have factories and packaging units in East Asia to manufacture semiconductors and complete the final stage of production for real-world use. Suppliers from East Asian nations have built strong trust with these ODMs due to decades of their efforts to attain volume reliability and technical performance, which led to entrenched relationships. ” For India to entrench in this ecosystem, it will require India made chips to meet rigorous global standards and performance benchmarks, which will take time and sustained efforts,” the Aayog said.
Semiconductors sit at the core of modern economic power. They serve as the critical backbone powering artificial intelligence, telecommunications, electric mobility, defence systems, healthcare technologies and digital public infrastructure..
The report said given their pivotal role in technology-driven advancements, semiconductors are not just strategic assets but central to economic resilience and national security.
“They are imperative to India’s aspiration to become a developed nation by 2047,” it said, adding that with intensifying geopolitical pressures and technology competition leading to the fragmentation of global supply chains, building domestic capabilities to design, manufacture and integrate semiconductors will decisively shape India’s future growth and strategic autonomy.
The global semiconductor market grew at a compounded annual growth rate (CAGR) of 6.5 per cent between 2014 and 2024 and is expected to grow at a slightly higher CAGR of 8.5 per cent over the next 5 to 10 years, underpinned by next-generation, technology-led growth drivers.
Parallel to the global semiconductor industry’s rapid surge, India’s semiconductor demand is also on an accelerated growth path. It is projected to grow at a CAGR of 19 per cent, reaching around USD 90 billion by FY2030 and potentially expanding further to over USD 200 billion by FY2035 if this momentum continues.
Anchored in India’s strengths in design talent, innovation capability, growing domestic demand, electronics manufacturing and materials, the NITI Aayog’s roadmap is built around five mutually reinforcing pillars: pioneering frontier R&D and design IP; Policy and Investment to mobilise long-horizon capital; production focused on advanced packaging and compound semiconductors; people across the full semiconductor talent pyramid; and Partnerships with trusted nations and global industry.
Releasing the report, Finance Minister Nirmala Sitharaman said the report is a clear declaration of India’s intent to move decisively from being a major consumer of chips to becoming an indispensable part of the global semiconductor value chain. Semiconductors are the foundational infrastructure of the 21st century.
Sitharaman said the roadmap rightly focuses on future segments where India can build strong positions: advanced packaging, compound semiconductors, wide-bandgap materials, and AI-native chip design.
“With this focused strategy, long-term perspective and sustained commitment, India is well placed to seize this historic opportunity,” the minister said.
Speaking at the event, Minister for Railways, Information & Broadcasting and Electronics & IT Ashwini Vaishnaw said semiconductors will define the next era of economic and technological leadership, and India is positioning itself as a trusted partner in that journey.
“Our focus is on building the full ecosystem — design, talent, materials, equipment, fabs and advanced packaging — so that global companies and partner countries can look to India as a dependable, long-term pillar of the semiconductor supply chain,” Vaishnaw added. (Agencies)
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