India - Semiconductor and Electronics Industry

Executive Summary

India is set to become a global leader in the semiconductor industry, with demand projected to cross $80 billion by 2026 and $110 billion by 2030.  The Indian electronics and semiconductors market is witnessing rapid growth, with a CAGR of 25% through 2028, owing to the high demand for smaller electronic devices, increasing penetration of the Internet of Things, and the emergence of advanced consumer products.  Integrated Circuits dominate the market, with a projected market volume of $3.8 billion in 2023.  The Indian government is focusing on establishing a robust semiconductor manufacturing ecosystem.

In March 2023, India and U.S. signed a memorandum of understanding (MoU) establishing the semiconductor supply chain and innovation partnership under the framework of India-U.S. Commercial Dialog.

Growth Drivers

India is highly dependent on imports for its semiconductor needs. India imports 95% of its semiconductors from countries like China, Taiwan, South Korea, and Singapore. Multiple factors contribute to the growth of the Indian electronics and semiconductors market.  These include the escalating demand for electronics products within the country, the government’s emphasis on developing a strong semiconductor manufacturing ecosystem, and the rising requirement for semiconductors in automotive, medical, industrial, and consumer electronics verticals, all expected to grow rapidly in India.  Export opportunities for U.S. companies exist in the embedded design, innovation, and systems domains and further up the value chain in artificial intelligence, the Internet of Things, cloud computing, and cybersecurity.

Key Challenges

U.S. exporters will face regulatory barriers and price-sensitive customers.  India also lacks infrastructure and ecosystem support, such as industrial parks, testing facilities, and R&D centers, as one might find in countries like China, Japan, and South Korea, to name a few.

Conclusion

The Indian electronics and semiconductors market represents a promising export opportunity with considerable growth potential.  The government’s efforts to establish a robust semiconductor manufacturing ecosystem could further enhance market growth in the coming years.  U.S. companies in the sector should closely monitor this dynamic market for lucrative prospects. 

U.S. semiconductor and electronics technology companies interested in exploring partnership opportunities with Indian industry players and educational institutions may contact the nearest U.S. office or the ICT team at the U.S. Commercial Service office in Hyderabad, India.