India's semiconductor market will reach $200 billion by 2035, starting from $64 billion in 2026. This indicates India's shift from production capacity to developing an integrated semiconductor ecosystem.
Market Growth and New Opportunities
Reports indicate that India's semiconductor market has grown significantly from $27 billion in 2021. This growth, driven by changes in the global supply chain and increased demand for semiconductors in areas such as artificial intelligence, digital infrastructure, mobility, and advanced manufacturing, has provided new opportunities for India to deepen its role in global semiconductor value chains.
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India's Government Plans for Semiconductors
The India Semiconductor Mission (ISM) 1.0 has been launched with a budget of ₹76,000 crore, leading to the approval of 12 semiconductor manufacturing projects, which include cumulative investments of about ₹1.64 lakh crore. These projects include one silicon plant, two compound semiconductor plants, and nine packaging centers. Additionally, this program has led to 23 chip manufacturers, with three semiconductor units starting their production and exports.
India now holds nearly 20% of the global semiconductor design workforce, strengthening its position in the design sector. According to this report, the Indian government launched the Semicon India 2.0 program in July 2026 with an increased budget of ₹1.275 lakh crore. This second phase adopts a six-pronged approach, including design, semiconductor materials and equipment, manufacturing, advanced packaging, research and development, and talent creation.
Future Outlook for the Semiconductor Market
Reports also indicate that Semicon 2.0 aims to extend its support beyond factories and packaging to areas such as specialty chemicals, gases, substrates, equipment, testing infrastructure, and design commercialization. This program will also assist in research and development and talent creation.
The next phase of India's journey in semiconductors depends on its ability to translate policy momentum into integrated ecosystem capabilities. In this regard, effective implementation, innovation, localization, and capability development have been identified as key priorities.
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