India's demographic edge, consumer demand bolster semiconductor ambitions

India's position in the global semiconductor race is strengthened by two key factors: a large and growing consumer base and an expanding working-age population that can support manufacturing expansion, according to Balaji Thirumalai, Partner and India Head of Semiconductors and Electronics Manufacturing Practice at Bain & Company.

However, securing access to cutting-edge semiconductor technology represents a critical barrier that policymakers must address. "The demographic dividend and domestic demand alone are not sufficient," Thirumalai noted, emphasizing that India must develop a holistic approach to compete with established semiconductor hubs.

The central government's Semicon 2.0 programme addresses this challenge through a six-pillar strategy encompassing talent development, fabrication facilities, outsourced assembly and testing operations, chip design, equipment manufacturing, and material production. This comprehensive framework mirrors the integrated ecosystems that have emerged in Taiwan, South Korea, and the United States, where semiconductor leadership extends beyond manufacturing plants to encompassing entire supply chains.

For India to establish itself as a meaningful player in global semiconductor markets, the industry and government must work in tandem to build an ecosystem where design capabilities, manufacturing infrastructure, materials sourcing, and equipment provision all develop simultaneously. Without this coordinated expansion across all sectors, India risks remaining dependent on foreign technology regardless of its manufacturing capabilities.