India's IT sector is strategically diversifying into the electronics and semiconductor industries to sustain growth amidst evolving global landscapes. This move is fueled by the substantial governmental backing these sectors are receiving, presenting new avenues for IT firms to leverage their existing expertise in engineering and R&D.
Several major IT companies have already begun to make inroads into the electronics and semiconductor domain. For instance, Wipro acquired a stake in Harman's Digital Transformation Solutions business for $375 million and has been servicing manufacturing companies through Wipro Pari. HCL Group is establishing a fabrication unit in Noida in collaboration with Foxconn, with the Union Cabinet already approving the ₹3,706 crore project. Infosys acquired InSemi, a semiconductor design and embedded firm based in Bengaluru. Cyient and L&T have also launched semiconductor subsidiaries, Cyient Semiconductors and L&T Semiconductor Technologies, respectively. TCS has partnered with Tata Electronics to accelerate semiconductor innovation and plans to launch domestically produced chips by 2026.
The Indian government is strongly supporting the development of the semiconductor and electronics industries. The Ministry of Electronics & Information Technology (MeitY) has launched the "Scheme for Promotion of Semiconductor Eco-System" with an outlay of ₹76,000 crore (US$ 9.48 billion). Furthermore, the Production-Linked Incentive (PLI) scheme for IT hardware products has approved 27 applications, with the government offering incentives of US$ 983.76 million over the next four years. In March 2024, the Cabinet approved a ₹1.26 trillion (US$ 15.2 billion) investment in three semiconductor plants.
These initiatives aim to reduce India's reliance on imports, enhance national security, and stimulate innovation. Currently, India imports over 90% of its semiconductor needs, making it vulnerable to supply chain disruptions. The India Semiconductor Mission (ISM), with a $10 billion budget, is at the forefront of building a robust ecosystem for chip manufacturing and design. This includes setting up fabrication units, enhancing design and packaging capabilities, boosting R&D, and creating skilled jobs.
The efforts are already attracting significant investments. The Tata Group, in partnership with PSMC, is constructing a ₹91,000 crore chip fabrication facility in Gujarat. Micron Technology is investing $2.75 billion in an assembly, testing, marking, and packaging (ATMP) facility. Other companies like Adani Group, HCL-Foxconn and Kaynes Technology are also launching projects.
India's electronics manufacturing sector has grown sixfold in the last 11 years, reaching over $150 billion in 2025. Domestic electronics production has increased from US$ 29 billion in FY15 to US$ 101 billion in FY23. The government is targeting US$ 300 billion in electronics manufacturing by FY26. Mobile phone manufacturing has surged, reaching US$ 49.3 billion, enabling India to meet 97% of its domestic demand. India has also become the second-largest mobile phone manufacturing country after China.
The Indian semiconductor market is projected to grow from USD 53.2 billion in 2024 to USD 161.0 billion by 2033. This growth is driven by increasing digitization, government support, and the "Make in India" initiative. The consumer electronics and appliance industry in India is expected to reach $20.6 billion by 2020.
This strategic shift by India's IT sector into chip and electronics manufacturing is poised to not only mitigate growth challenges but also position the country as a key player in the global technology landscape.
