India’s semiconductor market is projected to grow more than threefold from nearly 64 billion US dollars in 2026 to 200 billion US dollars by 2035, according to an EY-IESA report.
The report, titled ‘Semicon India 2.0: From capacity creation to ecosystem leadership’, said the projected growth presents an opportunity to convert rising domestic demand into manufacturing, innovation and greater supply-chain resilience.
Consumer electronics currently accounts for around 30 per cent of India’s semiconductor market, followed by the automotive sector at 16 per cent and industrial applications at 15 per cent.
Emerging areas including artificial intelligence, data centres, telecommunications, electric mobility and advanced manufacturing are expected to create additional demand for semiconductors.
The report noted that India’s semiconductor imports increased more than fivefold from 5.7 billion US dollars in FY17 to 30.3 billion US dollars in FY25, registering a compound annual growth rate of 23 per cent.
It said the increase highlights the need to translate growing domestic demand into local semiconductor fabrication and manufacturing capabilities.
India also has nearly 20 per cent of the world’s chip design engineers, providing a significant talent base for domestic semiconductor design, manufacturing and commercialisation.
India Electronics and Semiconductor Association President Ashok Chandak said India has an opportunity to combine its engineering talent, electronics demand, design capabilities and emerging manufacturing capacity with resilient global supply-chain partnerships.
He said the next phase of the sector would depend on execution, innovation, technology commercialisation, indigenous intellectual property, specialised talent and deeper ecosystem development.
The report also highlighted the expansion of India’s broader electronics manufacturing sector. Total electronics production increased nearly sixfold from Rs 1.9 lakh crore in FY15 to Rs 11.3 lakh crore in FY25. Domestic manufacturing grew sevenfold, while electronics exports increased elevenfold during the decade.
Aisha Ali Hussaini, Partner and Semiconductor Tax Leader at EY India, said India’s market scale, engineering talent, policy momentum and expanding electronics ecosystem provide a strong foundation for deeper semiconductor value addition.
She stressed the need for a predictable fiscal and regulatory environment, greater alignment between central and state policies and targeted support for emerging technologies to improve project viability and accelerate commercialisation.
The report identified advanced packaging, compound semiconductors, photonics and chip-to-system integration as high-potential areas.
It recommended aligning state-level policies with Semicon 2.0, establishing integrated manufacturing clusters with shared infrastructure and introducing specialised talent-certification programmes covering fabrication, design and packaging.
