India's Semiconductor Market to Reach $155 Billion by 2031

A report by Kotak Mahindra Mutual Fund projects that India's semiconductor market will reach 155 billion USD by 2031, growing at a compound annual growth rate of 20 per cent. This expansion would increase India's share of global semiconductor consumption from an estimated 6 per cent in 2026 to approximately 9 per cent by 2031. The growth is driven by domestic demand for AI data centers, 5G, electric vehicles, and defense, supported by government initiatives such as the Design Linked Incentive programme and 50 per cent capex support.

While India currently employs 20 per cent of the global chip design workforce, it remains dependent on imports for raw materials and equipment. To address this, the country is scaling manufacturing and packaging through projects involving Micron, Tata-PSMC, Kaynes, and CG Semi. OSAT/ATMP capacity is expected to grow from 15 million chips per day in 2026 to 48 million by 2028.

Broadly, the Government of India targets a total electronics production value of 500 billion USD by fiscal year 2031. Electronic component production is expected to see the most aggressive growth, rising more than 14-fold from 10.5 billion USD in FY24 to 150 billion USD by FY31. Mobile phone production will remain the largest category, projected to reach 159 billion USD, while wearables, IT hardware, and auto electronics are also expected to expand significantly.