India's $200 Billion Chip Market Target Draws Global Investment
New Delhi commits over $20 billion in government support for domestic semiconductor production and electronics, attracting major global tech firms.
India's Semiconductor Market Expansion
India aims to grow its semiconductor market to $200 billion by 2035, up from an estimated $50 billion in 2026, according to Indian government projections. New Delhi has committed over $20 billion in government support to boost domestic chip manufacturing.
This initiative forms part of India's broader "Techade" strategy, moving the nation beyond IT services towards foundational semiconductor production, electronics, and artificial intelligence.
Between 2017 and 2025, India's import data shows the country imported approximately $150 billion worth of semiconductors, highlighting a strategic shift towards self-reliance in this critical sector.
Manufacturing Growth and Key Investments
India's manufacturing sector reports five assembly, testing, and packaging (ATP) plants are now in commercial operation, involving international firms like US-based Micron Technology, alongside Indian companies Kaynes, CDIL, and Suchi Semicon, and the India-Japan-Thailand joint venture CG Semi.
Seven additional projects have received government approval, notably Tata Electronics, which is building a significant chip facility in Gujarat in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC).
Parallel to this, India's electronics production surged from $31 billion in 2014-15 to an estimated $133 billion in 2024-25, driven by production-linked incentive (PLI) schemes from New Delhi. Multinational companies, including Apple and Samsung, have expanded their manufacturing operations in India.
Data Centre Boom and Talent Development
Indian government reports indicate the country currently accounts for about 3% of global data centre capacity. To address this, nearly $70 billion worth of data centre projects are under construction, with an additional $90 billion announced.
Major investors include Indian conglomerates Reliance Industries and Adani Group, alongside US technology firms Amazon, Microsoft, and Meta. Google announced a $15 billion AI and data centre hub in Visakhapatnam, aiming to connect India with markets in Africa and Australia.
India also has nearly 20% of the global chip-design workforce, with Technology Minister Ashwini Vaishnaw stating approximately 70,000 design engineers were trained over the past four years.
India's push for domestic manufacturing and digital infrastructure is expected to intensify competition for foreign direct investment and skilled talent across Asia. This aligns with a "China Plus One" supply chain diversification strategy, as companies seek alternative production bases.
While India projects AI-linked jobs to nearly double to 1.25 million by 2027, Japanese investment bank Nomura recently identified India as a primary location for AI-driven job disruption in Asia, due to its large legacy IT sector.
Businesses operating in Southeast Asia, particularly those in electronics manufacturing and IT services, should monitor these shifts for potential impacts on labour markets and investment flows.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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