India's semiconductor industry is on the cusp of a significant transformation, poised to experience remarkable growth over the next few years. A recent report published by the financial services firm UBS predicts that the demand for semiconductors in India is set to double from $54 billion in 2025 to an impressive $108 billion by the year 2030. This projection signals not only a robust recovery post-pandemic, but also the emergence of India as a vital player in the global semiconductor landscape.

The report underscores a projected compound annual growth rate (CAGR) of 15 per cent for the Indian semiconductor market over the next five years. This rate of expansion outstrips the global average, underscoring the unique dynamics at play within India's economy. Key drivers of this growth include the nations youthful demographic, which is increasingly becoming tech-savvy, the rising demand for advanced chips by various industries, and the supportive policies enacted by the Indian government aimed at promoting domestic manufacturing and innovation in technology.

Furthermore, the UBS report, which was referenced by the Asian News International (ANI), emphasized the critical role of localization efforts in bolstering India's semiconductor revenues, projecting that these initiatives could contribute approximately $13 billion by 2030. Currently, India represents a mere 0.1 per cent of the global wafer manufacturing capacity and allocates about 1 per cent of its annual spending to semiconductor equipment. Despite these modest figures, the country accounts for around 6.5 per cent of global semiconductor demand, highlighting its emerging status as a crucial end market.

As global companies reassess their supply chains in light of tariff uncertainties, many are adopting a China plus one strategy, which involves relocating final assembly operations away from China to diversify their risk. While China currently dominates the tech manufacturing sector, Indias strength lies in its vast pool of software and services talent. Notably, India is home to nearly 20 per cent of the world's chip designers who work with multinational firms, further enhancing its profile within the semiconductor industry.

Even though the United States and China are still the largest markets for semiconductors, India's projected demand of $54 billion by 2025 illustrates its rising significance in the global semiconductor ecosystem. This growth trajectory not only promises to boost Indias economy but also positions the country as a strategic partner for nations looking to diversify their technology supply chains.