India's semiconductor sector will boom, with the market expected to reach $300 billion by 2035

India's semiconductor market is projected to nearly triple to $120 billion by 2030 and reach $300 billion by 2035. This is primarily due to the rapidly increasing use of artificial intelligence (AI), growth in the automobile sector, and the expansion of data centers.

Deloitte's report, "Technology, Media, and Telecommunications Predictions 2026," states that India is poised for a major transformation. It is expected that domestic production will increase to meet more than 60 percent of domestic needs by the end of 2035. 

India's semiconductor market is projected to reach $45-50 billion in FY2024-25 and has been growing at a rate of 20 percent over the past three years. Driven by AI, automobiles, data centers, and electronics manufacturing, this market could reach $120 billion by 2030 and $300 billion by 2035.

The report states that by 2035, with the support of ISM and state governments, India is expected to have 4-5 silicon fabs, 8-10 compound fabs, 1-2 display fabs, and 20-25 assembly and testing units. 

By 2035, 60 percent of the country's total demand will be generated domestically. Sectors such as mobile phones, automobiles, computers, and data centers are expected to account for more than 70 percent of total semiconductor demand by 2035.

Supported by the government's India Semiconductor Mission (ISM), the sector has already attracted over $19 billion in investment through 10 approved projects. 

These include eight OSAT units, one compound fab, and one semiconductor fab. Deloitte reports that 18-20 additional projects with a total investment of $20-25 billion are currently in various stages of development.

Will the investment be this much?

India's semiconductor industry is expected to attract an additional $50 billion in investment over the next five years. An additional $75-80 billion is expected between 2030 and 2035, further strengthening the entire system. 

The growth of the semiconductor sector will also create significant employment. It is estimated that by 2035, this industry could create approximately 2 million jobs. 

Approximately 30 percent of these jobs will be in manufacturing, 30 percent in design services, and the remaining 40 percent in other related fields.

However, Deloitte cautions that maintaining this momentum will depend on proper implementation of the plans. 

The report recommends that policies be developed into a robust, long-term national plan, rather than just short-term plans, to ensure consistent funding. 

It also emphasizes the need for better coordination between the central and state governments to ensure easier access to land, electricity, water, and infrastructure, and to implement a single-window system.