India is aiming to build a robust semiconductor ecosystem worth up to $150 billion by 2035, with strategic investments and policy support to reduce import dependence and strengthen domestic capabilities.
India is positioning itself to become a significant player in the global semiconductor industry, with a target of building a $120–150 billion semiconductor value chain by 2035. According to a report released by NITI Aayog’s Frontier Tech Hub, achieving this vision will require a coordinated push involving government funding, private investment, and international partnerships.
The report highlights the importance of semiconductors as the backbone of modern technology, powering sectors ranging from artificial intelligence and telecommunications to defence and healthcare. As India’s digital economy expands, the need for a resilient and self-reliant semiconductor ecosystem has become increasingly critical.
To realise this ambitious target, the report recommends that the central government fund at least one-third of the total investment required. This financial support is expected to reduce risks for investors and attract long-term capital into the sector.
The total investment needed over the next decade is estimated to range between $135 billion and $180 billion. These funds will be allocated across various segments, including fabrication facilities, advanced packaging units, design infrastructure, and ecosystem development.
Building semiconductor fabrication plants, or fabs, is particularly capital-intensive. The report notes that a single modern fab can cost upwards of $5 billion, while advanced-node facilities may require investments exceeding $15 billion. This underscores the need for strong policy backing and financial incentives to encourage participation from both domestic and global players.
Rather than directly competing with global leaders in cutting-edge wafer fabrication, the report suggests that India should focus on areas where it can achieve strategic advantage. These include advanced packaging, outsourced semiconductor assembly and testing (OSAT), semiconductor design, and system architecture.
Additionally, the report emphasises the potential of wide-bandgap materials such as Silicon Carbide (SiC) and Gallium Nitride (GaN). These materials are critical for next-generation technologies, including electric vehicles, renewable energy systems, and high-frequency communications.
By concentrating on these niche segments, India can establish itself as an indispensable part of the global semiconductor supply chain while avoiding the immense costs and competition associated with advanced fabrication.
The NITI Aayog report outlines five key pillars to guide India’s semiconductor strategy: Pioneering, Policy and Investment, Production, People, and Partnership.
Under the ‘Pioneering’ pillar, the focus is on innovation and developing cutting-edge technologies. ‘Policy and Investment’ emphasises the need for a supportive regulatory framework and financial incentives. ‘Production’ involves building manufacturing capabilities, while ‘People’ highlights the importance of developing a skilled workforce. Finally, ‘Partnership’ focuses on strengthening international collaborations.
Key recommendations include establishing sovereign access to electronic design automation (EDA) tools, creating a national semiconductor capital framework, and developing a robust talent pipeline. The report also calls for expanding trusted partnerships with countries such as the United States, Japan, and European nations.
India already has a strong presence in semiconductor design, accounting for nearly 20% of the global design workforce. The report suggests leveraging this advantage to develop more than 100 advanced semiconductor intellectual properties (IPs) by 2035.
Strengthening design capabilities will not only boost innovation but also increase India’s share in the global semiconductor value chain. It will enable domestic companies to move up the value ladder and reduce reliance on imported technologies.
One of the most critical challenges highlighted in the report is India’s heavy dependence on semiconductor imports. Currently, 90–95% of the country’s semiconductor demand is met through imports, exposing key sectors to global supply chain disruptions.
The report warns that this dependence poses a significant strategic risk, particularly for industries such as electronics, automobiles, telecommunications, healthcare, and defence.
To address this issue, India aims to achieve 35–50% self-sufficiency in semiconductor production by 2030. By 2035, the goal is to retain up to 70% of the value generated from chips consumed domestically.
India’s semiconductor import bill has been steadily increasing over the years. Between FY17 and FY25, the country spent nearly $150 billion on semiconductor imports. During this period, imports grew at a compound annual growth rate of 23%.
If this trend continues, the annual import bill could reach $240 billion by 2035. This growing financial burden underscores the urgency of building a domestic semiconductor ecosystem.
At the same time, India’s semiconductor demand is expected to exceed $200 billion by 2035, driven by rapid growth in electronics manufacturing, artificial intelligence, electric vehicles, cloud computing, and defence modernisation.
Globally, the semiconductor market is projected to surpass $1.5 trillion by 2035, presenting a significant opportunity for India to expand its footprint in the industry.
The report identifies advanced packaging and OSAT as key areas where India can achieve global leadership. By developing expertise in these segments, the country could become one of the top three destinations worldwide for semiconductor packaging and testing services.
In addition, the report highlights the potential for India to build capabilities in mature-node and compound semiconductor manufacturing. These segments are less capital-intensive compared to advanced-node fabrication and offer significant growth opportunities.
NITI Aayog Vice Chairman Ashok Kumar Lahiri emphasised the strategic importance of semiconductors in achieving the vision of a developed India, or “Viksit Bharat.” He noted that reliance on imported “black-box” technologies poses a major risk to the country’s economic and technological sovereignty.
Semiconductors play a crucial role in enabling advancements across multiple sectors, including artificial intelligence, defence systems, mobility, energy infrastructure, and digital services. Building domestic capabilities in this sector is therefore essential for ensuring long-term growth and resilience.
Conclusion
The NITI Aayog report outlines a comprehensive roadmap for transforming India into a global semiconductor powerhouse by 2035. By focusing on niche segments, strengthening design capabilities, and reducing import dependence, the country can position itself as a key player in the global supply chain.
While the journey will require substantial investments and coordinated efforts, the potential rewards are immense. With the right policies, partnerships, and execution, India can turn its semiconductor ambitions into reality and secure its place in the future of technology.