India’s Chip Drive May Cut Imports by $20 Billion, Says McKinsey
India’s growing focus on building a strong semiconductor industry could help the country reduce chip imports by $10–20 billion, according to a recent report by consultancy firm McKinsey. The report emphasizes that a combination of targeted government incentives and global partnerships is crucial for India to establish a solid presence in the global semiconductor supply chain.
Currently, India’s semiconductor strength lies mainly in design, with the country housing around 20% of the global semiconductor design workforce. It also hosts R&D centers of several major global chip companies. However, the country still depends heavily on imports for chip manufacturing and advanced production processes.
McKinsey estimates that India’s semiconductor market could grow from $34.3 billion in 2023 to over $100 billion by 2032. Several big-ticket projects between $3 billion and $11 billion have already been announced, focusing on OSAT (Outsourced Semiconductor Assembly and Testing) and older-generation fabrication nodes.
India’s chip design capability is supported by a strong talent base and an expanding start-up ecosystem, placing the country among the top three global design hubs. The government has committed $10 billion in incentives to boost local manufacturing.
However, the report also notes challenges such as high capital costs, limited access to cutting-edge manufacturing technology, and gaps in the domestic supply chain—particularly in high-purity materials and cleanroom infrastructure.
To overcome these hurdles and speed up progress, the report urges India to collaborate closely with global semiconductor companies and continue enhancing its domestic capabilities.
Source: ET Manufacturing
