India's Electronics and Semiconductor Industry Is Entering a New Growth Phase
India's electronics and semiconductor industry is transitioning from being led by consumption to a more comprehensive ecosystem involving production, design and technology. Increased demand for smartphones, automotive electronics, EVs, industrial electronics, telecommunication systems, AI and data infrastructure will be driving opportunities in the electronics value chain.
While doing so, India is developing its semiconductor capabilities through policies and investments in this sector, and through strategic partnerships with other countries. There is an increasing emphasis on not just manufacturing electronics but also on developing components, semiconductor manufacturing, packaging, testing and design infrastructure.
From this perspective, there is no better opportunity than that for Japanese companies. While Japan can offer India its rich knowledge base in semiconductor materials, manufacturing equipment, engineering and components, India will have to offer its huge domestic market and its growing engineering and manufacturing capabilities.
Together, these complementary strengths can support more resilient and globally connected electronics and semiconductor supply chains.
Why India's Electronics Manufacturing Market Matters
The electronics industry in India has grown a lot due to increased consumption at home as well as the work being done by the Indian government to improve manufacturing capability. This is achieved through the government scheme known as the Electronics Component Manufacturing Scheme which was approved in 2025.
This shift is important because a competitive electronics ecosystem requires much more than assembling finished products. It depends on printed circuit boards, sensors, displays, semiconductor devices, batteries, specialised components, machinery, testing facilities, materials and a network of specialised suppliers.
Having such capability will ensure one is less dependent on the supply chain, and also create opportunities for both Indian and international firms to set up their manufacturing base.
How Semiconductors Are Driving India's Technology Growth
Semiconductors form the bedrock of today's electronics. They power our mobile phones, vehicles, industry, communications network, healthcare technology, data centres and artificial intelligence infrastructure. With the rapid pace of digitalization, access to semiconductors has become a critical economic and strategic necessity.
The Indian semiconductor strategy is thus one that looks to build an ecosystem rather than just focus on a specific stage of production. The India Semiconductor Mission (ISM) caters to the development of semiconductor and display manufacturing, while government programs offer support for semiconductor fabrication, assembly, testing, packaging and other technologies.
The opportunity, however, goes beyond semiconductor fabs alone. Chip design, advanced packaging, OSAT, manufacturing equipment, specialty materials, chemicals, testing technologies, R&D and talent development all fall within the scope of the overall ecosystem.
This means there are several different ways in which companies can enter the burgeoning semiconductor space in India.
For businesses, this creates multiple entry points into India's growing semiconductor market.
India-Japan Semiconductor Cooperation Is Gaining Momentum
The India-Japan relationship is becoming increasingly significant in the global semiconductor landscape. In July 2023, India's Ministry of Electronics and Information Technology and Japan's Ministry of Economy, Trade and Industry signed the Japan-India Semiconductor Supply Chain Partnership to strengthen cooperation and improve semiconductor supply-chain resilience. The framework encourages both government-to-government and business-to-business collaboration.
The partnership is already translating into industry-level engagement
One of the noteworthy alliances is that of Tokyo Electron and Tata Electronics for the infrastructure of semiconductor equipment for the Tata Electronics plants located in Dholera, Gujarat and Jagiroad, Assam. Other areas of the alliance include training of workforce, technological assistance, improvements and research & development.
The other noteworthy project is that of the semiconductor OSAT project by the Japanese company Renesas Electronics in collaboration with CG Power and Stars Microelectronics. The upcoming plant is meant to have semiconductor packaging capability for use in automotive, consumer electronics, industrial technology and 5G.
Such alliances show how Japanese technology and expertise can be an asset for Indian manufacturing.
Key Semiconductor Opportunities for Japanese Companies in India
There are several aspects where opportunities for Japanese firms can be sought in India's semiconductor and electronics industry value chain.
In the semiconductor equipment and material segment, opportunities can be found as India builds up its capacities in manufacturing, packaging and testing of chips. Firms dealing in machines, materials, chemicals and equipment for the manufacture of semiconductors will find India a good place to look out for opportunities in the developing manufacturing hubs.
The other area is electronics component manufacturing. The trend of India is becoming more about the development of its own components manufacturing capacity and getting its manufacturers into the global value chain. Opportunities can be explored by Japanese firms in setting up manufacturing facilities, building up supplier relationships and technology tie-ups.
Another area where a lot of scope exists is semiconductor designing, research and talent. India's engineers will add value to the Japanese strengths in the hardware and manufacturing process knowledge domain.
Building Resilient India-Japan Semiconductor Supply Chains
The semiconductor industry is one that is very interlinked, and supply chain resilience has thus become a critical factor. Rather than having every country do all steps in the manufacturing process individually, countries can specialize in their areas of strength, and collaborate.
This would be an ideal situation for India and Japan. The Japanese know how to manufacture equipment, materials and processes, which could complement the manufacturing strength, talent and home market potential of India.
Japanese firms would have more options for India besides its being a market. India could act as a potential location of manufacturing, engineering and design for Japan.
For Indian firms, partnership with Japanese firms could help them acquire technology and international reach.
JIBB and the Future of India-Japan Electronics Collaboration
As the Indian electronics and semiconductor ecosystem evolves, the market entry process would require more than just recognizing an opportunity. Companies would have to know the market, find potential partners and evaluate the scope of investment in addition to familiarizing themselves with the processes of cross-border business.
This is where robust India-Japan business ecosystem becomes crucial. The Japan India Business Bureau (JIBB) seeks to provide assistance to the Japanese and Indian businesses in order to establish contacts and learn about each other and the Indian market.
The electronics and semiconductor industry stands at the forefront of India-Japan industrial cooperation which is expected to happen. Thanks to the Indian policy initiative, technological strengths of Japan and global demands in semiconductors, the next step will be associated with the creation of partnerships based on technology, investment, production and talents.
For companies willing to join, the opportunity will consist not only of entering India's semiconductor market, but also becoming a part of India-Japan technology ecosystem.
Frequently Asked Questions
1. Why is India's semiconductor industry growing?
India's semiconductor industry is growing due to rising demand for electronics, automobiles, AI, telecommunications and digital infrastructure, combined with government support for semiconductor manufacturing, design, packaging, testing and related capabilities.
2. What opportunities are available for Japanese semiconductor companies in India?
Opportunities include semiconductor equipment, materials, electronics components, manufacturing technologies, OSAT, chip design, R&D, workforce development and technology partnerships.
3. What is the India-Japan Semiconductor Supply Chain Partnership?
It is a cooperation framework established in 2023 between India's MeitY and Japan's METI to strengthen semiconductor supply chains and promote bilateral government and business collaboration.
4. Which Japanese companies are involved in India's semiconductor ecosystem?
Japanese companies including Tokyo Electron and Renesas Electronics have established or announced significant collaborations with Indian companies in semiconductor equipment, manufacturing, packaging and ecosystem development.
5. Why is India attractive for Japanese electronics companies?
India combines a large and growing domestic market with engineering talent, expanding electronics manufacturing capabilities, government incentives and opportunities to participate in global supply chains.
6. How can Japanese companies enter India's semiconductor market?
Companies can explore options including local manufacturing, joint ventures, technology partnerships, supplier relationships, R&D collaborations and strategic investment, depending on their capabilities and business objectives.
7. How can JIBB help Japanese companies explore India?
JIBB can support businesses seeking to understand India-Japan business opportunities, identify potential connections and develop relationships within the Indian market and emerging industrial sectors.
