What's Happening?
India's electronics and semiconductor sector is experiencing significant growth, driven by the Production Linked Incentive (PLI) scheme. This initiative has attracted global companies and supported domestic champions in scaling operations. The country
is transitioning from merely assembling products to creating a comprehensive ecosystem, producing key sub-assemblies such as printed circuit boards, camera modules, and display units. Prime Minister Narendra Modi has highlighted semiconductors as a crucial frontier for the Indian economy, referring to them as 'digital diamonds.' The Semicon India 2025 event showcased India's progress, with projects approved for fabrication, assembly, and testing units in Gujarat and Karnataka. The first commercial multi-chip modules have been shipped from Sanand, indicating early capacity for indigenous chip-packaging.
Why It's Important?
The expansion of India's electronics and semiconductor sector is crucial for the country's economic growth and global competitiveness. By reducing import dependence, which currently stands at over 60% for high-end components, India is positioning itself as a major player in the global electronics market. The PLI scheme is expected to generate significant employment and value addition, with states offering incentives such as land parcels and power subsidies tailored for electronics units. By 2030, India's electronics exports could exceed the FY26 target of $120 billion, making it the second-largest export category after petroleum. This growth is set to transform India into a globally competitive high-technology manufacturing hub.
What's Next?
India is expected to continue its trajectory of growth in the electronics and semiconductor sector, with plans for at least three operational semiconductor manufacturing or packaging facilities by 2030. The government aims to further reduce import dependence and enhance local manufacturing capabilities. Investment in components, sensors, and embedded systems will be prioritized to generate jobs and value addition. The country's focus on localization and reducing import reliance will likely strengthen its position in the global market, fostering a robust manufacturing ecosystem.
Beyond the Headlines
The development of India's electronics and semiconductor sector has broader implications for the country's industrial landscape. The integration of policy, infrastructure, and industry is creating an environment conducive to rapid scaling of manufacturing ecosystems. This transformation demands continuous investment in design talent, skilling, and process innovation. Automation and digitalization will play critical roles alongside policy incentives, potentially positioning India as a global manufacturing leader by 2030.
