India’s Prime Minister Narendra Modi has set an ambitious target for the country’s electronics industry, aiming to expand it to $500 billion by 2030. In a keynote address at a semiconductor conference near New Delhi on Wednesday, Modi highlighted India’s growing role in technology, particularly semiconductors, as a driver for economic growth. Currently, India’s electronics market stands at approximately $155 billion.
India has been actively encouraging global chipmakers to set up manufacturing within its borders, leveraging subsidies similar to those that helped Apple Inc. assemble $14 billion worth of iPhones in the country. To date, the Indian government has approved over $15 billion in semiconductor investments. Notably, Tata Group plans to establish the country’s first major chip manufacturing facility, while U.S.-based Micron Technology is working on a $2.75 billion assembly plant in Modi’s home state of Gujarat. Additionally, Israel’s Tower Semiconductor Ltd. is in talks with Indian billionaire Gautam Adani to build a $10 billion chip fabrication plant in western India.
“This is the perfect time to invest in India,” Modi remarked. “In the 21st-century India, the chips are never down.”
The global semiconductor sector has become increasingly critical, especially as geopolitical tensions between the U.S. and China widen. Nations like the U.S., Germany, Japan, and Singapore are pouring billions into domestic chip production to reduce their reliance on overseas suppliers, particularly in regions like China and Taiwan. The push is driven by the need for semiconductors in cutting-edge technologies such as artificial intelligence (AI) and electric vehicles (EVs).
At the conference, industry leaders discussed their expansion strategies for India. Kurt Sievers, CEO of Dutch chipmaker NXP Semiconductors NV, revealed that his company plans to invest over $1 billion in the country in the coming years to enhance research and development capabilities.
Analysis:
India’s burgeoning electronics and semiconductor sectors present a unique investment opportunity. The country’s efforts to secure foreign investments and foster local talent in chip production are likely to position it as a key player in the global supply chain. Investors in India’s tech space could see significant returns as the government rolls out incentives to bolster domestic manufacturing. The semiconductor industry, in particular, is poised for growth given the increasing global demand for chips in everything from smartphones to electric vehicles. The ongoing efforts to establish major chip plants through partnerships with international companies suggest that India could become a critical hub for semiconductor production in the near future.
By encouraging investments through subsidies and strategic partnerships, India aims to reduce its reliance on imported semiconductors and capture a more substantial share of the global market. This long-term strategy is essential, given the geopolitical and supply chain challenges facing the industry. Investors, particularly those with a focus on emerging markets, would be wise to watch India’s electronics and semiconductor sectors closely. Should India meet its $500 billion target by 2030, the market could offer substantial growth potential for early entrants.
