India’s semiconductor market could grow at a 20% CAGR to $155 billion by CY31, driven by rising electronics demand, chip-design strength and expanding manufacturing and packaging capabilities.
India’s semiconductor market is expected to expand to $155 billion by calendar year (CY) 2031 from an estimated $62 billion in CY26, representing a compound annual growth rate (CAGR) of about 20%, according to a report by Kotak Mahindra Mutual Fund.
The growth would increase India’s share of global semiconductor consumption from around 6% in CY26 to nearly 9% by CY31, the report said. Rising domestic demand, a growing chip-design base, government incentives and the development of local manufacturing and packaging capabilities are expected to support this expansion.
India’s semiconductor ecosystem is also undergoing a shift from its established strength in chip design towards wafer fabrication, assembly, testing and other parts of the supply chain. The report rated India’s current position in chip design as “Strong” and set “Leadership” as the CY30 ambition. In wafer fabrication, the country is moving from an “Absent” position towards “Pilot-Scale”, while OSAT and ATMP capabilities are expected to progress from “Emerging” to “Scaled”.
Chip design remains one of India’s biggest advantages. The country has about 300,000 chip designers, representing nearly one-fifth of the global chip-design workforce, according to the report.
Cost competitiveness could further strengthen India’s position in semiconductor packaging and testing. OSAT costs in the country are estimated to be 20–30% below those of comparable markets. The report identified a combination of lower costs, manufacturing scale, a large talent pool and government support as key advantages, including capital subsidies of up to 50%.
India is also expected to see a sharp increase in OSAT and ATMP capacity. The combined target capacity of announced projects is projected to rise from about 15 million chips per day in CY26 to 48 million chips per day by CY28. Projects contributing to this expansion include those planned by CG Semi, Kaynes Semicon, Tata Electronics and the HCL Group-Foxconn partnership.
The report said demand from end-use sectors will remain an important driver of semiconductor consumption. Electronics, automotive, industrial applications, communications and emerging technologies are expected to contribute to the expanding market opportunity.
At the same time, India continues to depend heavily on overseas suppliers for several critical inputs. These include semiconductor manufacturing equipment, specialty chemicals, electronic-grade gases, silicon wafers, substrates and lead frames.
The report’s projections suggest that India’s semiconductor opportunity will expand rapidly through the end of the decade, while the development of domestic manufacturing and supply-chain capabilities will determine how much of this growing market can be captured within the country.
