‘Semiconductor market is projected to reach around $200 billion by 2035’: NITI Aayog

Bengaluru: The country’s semiconductor market is projected to reach around $200 billion by 2035. However, despite the growing domestic demand, nearly 90–95% of this demand is currently met through imports, leading to large foreign exchange outflows and increasing the vulnerability of critical sectors to supply-chain disruptions, a NITI Aayog report said on Friday.

To build a globally competitive semiconductor ecosystem in India will require nearly $135–180 billion in cumulative semiconductor investments over the next decade, directed toward growth capital across design, fabrication, advanced packaging, materials and supporting infrastructure, it said, adding that the government should commit at least one-third of the required investment to de-risk projects and anchor long-term investor confidence.

By 2035, the global semiconductor market is expected to exceed $1.5 trillion.

The report, 'Future of India's Semiconductor Industry', suggested that Fabs, advanced packaging, compound semiconductors and critical design infrastructure should be prioritised for public funding.

Alongside funding support, the focus should also be on stability, predictable incentives and coordinated execution across the value chain.

The report also suggested that India should target building a $120-150 billion semiconductor value chain by choosing leadership and purpose over participation. "Instead of chasing the global wafer race from behind, India should define its own pathway—one that is not only distinct but shaped by strategic self-sufficiency, ecosystem strength and global indispensability," the report stated.

Debjani Ghosh, Distinguished Fellow, NITI Aayog, said the country has taken important early steps through the India Semiconductor Mission. Investments in fabrication, assembly, testing and packaging, along with India’s deep design talent base, provide a strong foundation. "Yet, as the technology landscape continues to evolve rapidly, India must look ahead to identify emerging opportunities to leapfrog, rather than only strengthening its ability to catch up," she added.

Ghosh said India must build on its structural strengths—design talent, software capability, engineering depth, domestic demand, materials potential and trusted partnerships— while investing in frontier R&D, advanced OSAT (Outsourced Semiconductor Assembly and Test), critical materials, semiconductor IP, skilled talent and long-term institutional capacity.