India Targets 50% Semiconductor Self-Reliance By FY35 As Industry Eyes USD 205 Billion Market

India wants to produce enough semiconductors locally to meet half (50%) of its domestic demand by FY35, according to estimates from the Ministry of Electronics and Information Technology (MeitY).

The target comes at a time when the government is preparing the next phase of the India Semiconductor Mission (ISM 2.0) and several chip-related projects are moving closer to commercial operations.

A number of semiconductor fabrication and assembly units are already being built across the country. Officials expect some of these facilities to start production during the current year, marking a key step in India’s efforts to build a domestic chip manufacturing base.

Rise In Semiconductor Import Bills

India’s semiconductor imports stood at more than USD 30.3 billion in FY25. The figure was USD 19.3 billion in FY23 and USD 11.9 billion in FY19, showing how demand for chips has grown much faster than local production capacity. At the same time, the size of the domestic semiconductor market is expected to expand sharply.

Data showed the industry was valued at around USD 20 billion in 2020. It is estimated that the figure could rise to USD 205 billion by 2034, supported by growing demand from electronics, automobiles, telecom equipment and industrial applications.

Growth rates have fluctuated in recent years but are expected to stabilise between 15% and 19% annually through 2034. Separately, NITI Aayog estimates semiconductor consumption in India could rise to USD 206 billion by 2035 from an estimated USD 44 billion in FY26.

India Semiconductor Mission 2.0 Takes Centre Stage

Government efforts to build local capabilities are now entering a new phase. While the first phase of the India Semiconductor Mission focused on establishing fabrication and assembly infrastructure, ISM 2.0 is expected to deepen domestic capabilities across chip design, specialised materials, research and advanced manufacturing.

The government is preparing the expanded programme with an estimated outlay of ₹1 lakh crore. The broader objective is to develop a complete semiconductor ecosystem, including chemicals, gases and other critical inputs required for chip manufacturing. As per analysts, the growing ecosystem could benefit stocks of the following companies:

• RIR Power Electronics

• Kaynes Technology India

• CG Power & Industrial Solutions

• MosChip Technologies

• SPEL Semiconductor Ltd

• SRF Ltd

• Gujarat Fluorochemicals Ltd

• Linde India Ltd

• Archean Chemical Industries Ltd

• Mindteck (India)

• Cyient

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South India Leads Semiconductor Activity

Notably, India’s semiconductor ecosystem remains concentrated in a few regions, although activity is spreading across the country. According to International Market Analysis Research and Consulting (IMARC), southern India accounted for 36.2% of the semiconductor ecosystem in 2025. Northern India followed with a 27.8% share. Western and central India together accounted for 22.5%, while eastern India represented 13.5%.

The consulting firm said India's geographically diversified manufacturing and demand base is helping support the industry's long-term expansion plans.

Sources:

NDTV

Business Standard

The Tribune