India’s semiconductor market is on track for significant expansion, with its valuation projected to nearly double from $52 billion in 2024 to $103.4 billion by 2030, according to a recent report by the India Electronics and Semiconductor Association (IESA).
The report, reviewed by The Financial Express, attributes this growth to rising demand in mobile handsets, information technology (IT), and telecommunications, along with increasing contributions from the consumer electronics, automotive, aerospace, and defense sectors.
Key Sectors Driving Expansion
IESA Chairman V Veerappan noted that India’s semiconductor industry is expected to maintain a 13% compound annual growth rate (CAGR) through 2030, with automotive and industrial electronics emerging as high-growth areas. Currently, mobile handsets, IT, and industrial applications account for nearly 70% of the industry’s revenue, a dominance that is projected to continue as demand surges across sectors.
The report also underscores the importance of research and development (R&D) in fostering innovation, particularly in smartphones, hearables, consumer durables, and network infrastructure such as routers.
Investment Boom and Government Incentives
IESA President Ashok Chandak highlighted a significant uptick in industry investment, with over $21 billion committed by IESA member companies in the past year alone. This wave of investment aligns with government initiatives offering targeted incentives for semiconductor fabrication plants and Outsourced Semiconductor Assembly and Test (OSAT) operations—a move aimed at bolstering domestic chip production.
Policy Recommendations to Sustain Growth
To maintain this momentum, IESA has called for strategic policy interventions, including:
• Extending the semiconductor incentive scheme beyond the current $10 billion allocation.
• Revising the design-linked incentive (DLI) program to better support domestic chip design.
• Setting ambitious local value addition targets, with a goal of 25% by 2025-26 and 40% by 2030 in electronics manufacturing.
• Launching a unified product development scheme to encourage high-impact semiconductor innovations.
• Strengthening workforce development programs to address the growing demand for skilled professionals in the sector.
With these measures in place, India’s semiconductor ecosystem is expected to become a global player in chip manufacturing and design, reducing reliance on imports and fostering a robust domestic industry.
