$110 Bn by 2030: Is India ready to lead the global chip shift?

India stands at a pivotal moment in the global semiconductor race as shifting geopolitics—most notably the U.S. imposing a 25% tariff on semiconductor imports—reshape the industry landscape.

While countries like Taiwan, China, and the U.S. continue to dominate semiconductor manufacturing, India is fast emerging as a serious contender. Backed by government initiatives like the India Semiconductor Mission and Tata Electronics’ US$10.44 billion investment in Gujarat, India’s semiconductor consumption is expected to surge from $22 billion in 2019 to $110 billion by 2030.

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The ongoing geopolitical developments, particularly the United States’ decision to impose a 25% tariff on semiconductor imports, are reshaping the global semiconductor landscape. While this move aims to bolster domestic manufacturing and reduce reliance on foreign suppliers, it has led to increased costs for U.S. companies and consumers, especially for products like smartphones, laptops, and electric vehicles .

For India, these tariffs could create both challenges and opportunities. Although India is not a major exporter of semiconductors to the U.S. and thus faces minimal direct impact, the shifting dynamics offer a strategic opening. As global companies seek to diversify their supply chains away from tariff-affected regions, India, with its growing electronics ecosystem and government-backed semiconductor initiatives, can attract increased investment and become a significant player in the global semiconductor industry.

India’s semiconductor market

A chip, or integrated circuit (IC), is a compact piece of silicon embedded with millions or even billions of transistors that process and store data. These chips are the foundational components of modern electronics, powering devices from smartphones and laptops to electric cars and industrial machinery. The core material enabling this functionality is a semiconductor, typically silicon, which possesses electrical properties that allow it to act both as a conductor and an insulator. This duality facilitates the creation of transistors that can switch on and off, representing binary data essential for computing.

Currently, the global semiconductor manufacturing market is largely dominated by Taiwan, China, the United States, South Korea, and Japan. However, with India witnessing remarkable growth in recent years—backed by strong governmental support and strategic initiatives such as the approval of three new semiconductor manufacturing facilities in 2024—the country is positioning itself as a key contender in the global semiconductor landscape.

According to a joint report by the India Electronics and Semiconductor Association (IESA) and Counterpoint Research, India’s semiconductor consumption is projected to soar from US$ 22 billion in 2019 to US$64 billion by 2026, marking a threefold increase with a compound annual growth rate (CAGR) of 16%. This momentum is expected to continue, with consumption estimated to reach US$110 billion by 2030, at which point India could represent around 10% of the global semiconductor demand. By the end of the decade, the wireless communications (US$26.5 billion), consumer electronics (US$26 billion), and automotive (US$22 billion) sectors are anticipated to be the primary drivers of this growth.

According to Srinivasa Moorthy SA, Chief of Strategy at Zettaone Technologies Private Limited –

“Bulk of India’s semiconductor imports currently come from China due to cost advantages. However, as this advantage fades, sourcing from other countries becomes necessary. Traditionally, semiconductor components haven’t faced import duties. But electronics exports to the US are subject to over 25% tariffs. With a bilateral agreement likely in the near future, we may see reduced tariffs on electronics, in exchange for India lowering duties on select items. For now, India still holds an advantage under the current tariff structure.“

India’s semiconductor market, 2022 (actual) and 2030 forecast ($billions)

Source: ITIF

Make in India, Make for the World

India is rapidly emerging as a global hub for high-end electronics manufacturing, with Apple’s recent moves signaling a major shift in the global supply chain. Apple plans to shift all iPhone assembly for the US market to India by the end of next year—a strategic pivot aimed at reducing dependence on China, especially in light of the new tariff rules introduced by US President Donald Trump.

This transition is not just reactive but part of Apple’s broader vision to diversify its manufacturing base. Over the past few years, Apple has steadily built its presence in India with the help of contract manufacturing giants like Foxconn and Tata Electronics. In March alone, Foxconn exported iPhones worth US$ 1.31 billion, setting a new monthly record, while Tata saw a 63% surge in exports to US$ 612 million. The urgency intensified after the latest US tariffs on Chinese goods, prompting Apple to accelerate exports of India-made iPhones to avoid higher duties. Beyond tariff evasion, Apple’s long-term goal is clear: produce over 60 million iPhones annually in India by 2026, effectively doubling its current output. With this momentum, India is poised to become the next major iPhone manufacturing powerhouse.

On March 5, 2025, the India Semiconductor Mission (ISM) signed a fiscal support agreement with Tata Electronics and Tata Semiconductor Manufacturing to set up a chip fabrication plant in Dholera, Gujarat. Tata will invest over US$ 10.44 billion in the facility, which will produce 50,000 wafers per month, with the central government covering 50% of eligible project costs. Approved in February 2024, the project is expected to generate over 20,000 skilled jobs and will serve global markets in automotive, computing, communications, and AI, in partnership with Taiwan’s Powerchip Semiconductor.

This shift is set to boost the India’s semiconductor ecosystem by increasing demand for locally sourced chips and components and opens new opportunities for investment in chip fabrication, packaging, and testing, while encouraging technology transfers and global partnerships—positioning India as a key player in the global semiconductor supply chain.

Navigating Hurdles, Unlocking Potential

Even though India has exhibited a phenomenal effort to transit from being a completely import dependent player to a producer of semiconductors, when it comes to compete with the globally established players like Taiwan, South Korea and the US, highly capital-intensive nature of this industry poses a significant challenge for India.

Here are some of the challenges in need of urgent addressing:

1.) Underdeveloped supply chain: India currently lacks a robust ecosystem for semiconductor-grade raw materials like silicon wafers, ultrapure water, and specialty chemicals.

2.) Shortage of specialized talent: While India excels in chip design, there’s a significant gap in skilled professionals for fabrication, assembly, and testing.

3.) Global competition: India faces stiff competition from established semiconductor hubs like Taiwan, South Korea, and the U.S., which already have mature ecosystems.

4.) Rapidly evolving technology: Keeping pace with cutting-edge semiconductor advancements requires continuous investment in R&D and infrastructure.

5.) Dependency on imports: Despite having a strong chemical and gas manufacturing sector, local companies must upgrade to meet semiconductor-grade standards.

6.) Need for ecosystem development: Building a self-reliant supply chain—including materials, equipment, and skilled labor—is essential for long-term competitiveness.

7.) Management of essential resources: Effective management of water and energy in manufacturing of semiconductors is a serious concern as India has already been struggling to manage these scarce resources.

8.) Export hurdles: Supply chain delays and customs bottlenecks pose significant challenges to India’s ambition of becoming a global semiconductor player.

India’s semiconductor push reflects more than just industrial ambition—it signals a calculated strategy to capture value in a rapidly evolving global supply chain. With the U.S. tariffs reshuffling sourcing strategies and global majors like Apple and Tata deepening their footprint in India, the country’s role is transitioning from peripheral to pivotal. The projected rise in domestic chip consumption to $110 billion by 2030 underscores this transformation. However, seizing this opportunity will require urgent focus on raw material supply chains, skilled workforce development, and policy efficiency. If addressed, India could well emerge as a cornerstone of future semiconductor manufacturing.