India's chip market seen at USD 200 billion by 2035 as focus shifts to ecosystem

India's semiconductor market is projected to expand to USD 200 billion by 2035, up from roughly USD 64 billion in 2026, as the country shifts from creating manufacturing capacity towards building a full-fledged semiconductor ecosystem, according to an EY and India Electronics and Semiconductor Association (IESA) report.

The market has climbed steadily over the past five years, rising from about USD 27 billion in 2021 to around USD 64 billion in 2026. That growth, set against a realignment of global supply chains and rising demand across artificial intelligence, digital infrastructure, mobility and advanced manufacturing, has opened room for India to take a deeper role in worldwide semiconductor value chains.

Under India Semiconductor Mission (ISM) 1.0, launched with an outlay of Rs 76,000 crore, twelve semiconductor manufacturing projects have been approved, carrying cumulative investments of about Rs 1.64 lakh crore. The approved projects comprise one silicon fab, two compound semiconductor fabs and nine packaging facilities. The programme has also recorded 23 chip tape-outs, while three semiconductor units have begun production and exports.

India now holds close to 20 per cent of the global semiconductor design talent pool, a position that strengthens its standing in the design segment.

To build on this base, the government rolled out Semicon India 2.0 in July 2026 with an enhanced outlay of Rs 1,27,500 crore. The second phase follows a six-pillar approach spanning design, semiconductor materials and equipment, fabrication, advanced packaging, research and development, and talent creation.

Semicon 2.0 is designed to extend support beyond fabs and packaging into semiconductor-grade materials, specialty chemicals, gases, substrates, equipment, testing infrastructure and design commercialisation, alongside backing for R&D and skills development.

The report notes that the next stage of India's semiconductor journey will hinge on converting policy momentum into integrated ecosystem capabilities, with execution, innovation, localisation and capability development emerging as the key priorities.