India’s hardware manufacturing is going through a remarkable change, particularly in semiconductors and other electronic devices. With globalization of supply chains, policy support and significant investments, the country is moving rapidly from being an “assembly hub”— a good portion of India’s electronics are still made overseas—to a complete manufacturing ecosystem. With this in mind, this article looks at the projected state of India’s hardware manufacturing industry in 2025, focusing on the manufacturing of chips and electronic devices and the key drivers and trends in device manufacturing, major projects that are shaping the future, and the implications for the economy and businesses in India.
Why India’s Hardware Manufacturing is Surging
1. Global Supply Chain Diversification
Recent years have witnessed disruptions in the global supply chains for electronics and semiconductors as a result of the pandemic, logistical issues, and trade conflicts. Businesses are trying to relocate or diversify their production away from China. Given the current adaptations in supply chains, India has incentive-based manufacturing along with a large domestic market which positions India to capitalize on the situation.
2. Government Policies & Incentives
India has been actively focusing on encouraging the manufacturing of hardware since the beginning of the India Semiconductor Mission (ISM). Under the ISM, the government offers subsidies to support the fabrication, design, and packaging of chips, which was initiated in December of 2021 (India Briefing). Additionally, the production linked incentive (PLI) schemes in the sectors of electronics, mobile phones and other hardware have also incentivized investments which helped in the development of various big infrastructure projects pertaining to
fabrication plants, assembly test mark packaging (ATMP) facilities, and outsourced semiconductor assembly and test (OSAT) facilities (iotadda.com).
3. Strong Domestic Demand & Device Market
India certainly has a robust and growing manufacturing sector providing for both the domestic and the export market. Demand is very high for consumer electronics such as smartphones and laptops, as well as Internet of Things devices, Electric Vehicles and all kinds of telecom devices and equipment. It is therefore understandable for the country to want to manufacture such devices and reduce reliance on imports. A good example of this is MSI’s recent decision to manufacture high-end gaming laptops locally, which is a sign of growing momentum in device manufacturing. (The Times of India)
4. Emerging Ecosystem & Talent Pool
India has a vast base of engineers, design houses, and component-manufacturing firms, making it possible to develop hardware ecosystems. The local production of several components, PCBs, camera modules and other sub-systems is either done or in the progress of localisation. As an example, in 2025, India sanctioned electronics-components manufacturing projects worth over ₹55 billion (~$625 million). (Reuters
Major Chip Manufacturing Projects & Milestones
Semiconductor Fabrication (Fabs)
India has a vast base of engineers, design houses, and component-manufacturing firms, making it possible to develop hardware ecosystems. The local production of several components, PCBs, camera modules and other sub-systems is either done or in the progress of localisation. As an example, in 2025, India sanctioned electronics-components manufacturing projects worth over ₹55 billion (~$625 million). (Reuters)
Assembly, Test, Marking & Packaging (ATMP) / OSAT
A number of ATMP / OSAT facilities are being set up to support packaging and testing of chips — a critical link in the value chain. For example, an OSAT facility by Kaynes Technology in Sanand, Gujarat, is expected to produce ~6.3 million chips per day. Another major one: a joint venture between HCL Group and Taiwan’s Foxconn near Jewar, Uttar Pradesh, approved May 2025, will generate ~20,000 wafers/month (~36 million chips annually) by 2027.
Indigenous Design & Made-in-India Chips
Beyond manufacturing, India is pushing for home-grown chip designs. For example, the Vikram 3201 32-bit space-grade processor developed by the Indian Space Research Organisation (ISRO) was unveiled in 2025, signifying India’s rising design credibility.
Device & Electronic Hardware Manufacturing Trends
Smart Devices, Laptops & Peripherals
The hardware boom isn’t only about chips—complete devices are increasingly being manufactured locally. MSI’s local production of high-end laptops (with RTX 50‐series graphics) via a partnership with Syrma SGS in Chennai is a recent example. This underscores that manufacturing of finished products is also shifting to India, not just components.
PCBs, Camera Modules, Sensors
Electronics components like PCBs, camera modules and laminates are being prioritised for manufacturing in India. As part of component import-substitution, the government approved projects totalling $625 million in October 2025 to build such capacity.
EVs, Telecom, Defence & IoT Devices
Hardware manufacturing in India is increasingly aligning with growth sectors—electric vehicles (EVs), 5G/6G telecom gear, IoT devices, defence electronics. Semiconductors for automotive, power-management ICs, display drivers are all part of the pipeline.
What’s Driving the Boom in 2025 Specifically
- Favourable Policy Timelines: The first wave of ISM projects and electronics PLI schemes are now moving into execution phase (2024-26). What was once promise is now physical activity.
- Global OEMs Re-shoring: Companies like MSI, Apple supplier base, smartphone firms are placing more manufacturing in India due to cost, diversification and incentive benefits.
- Domestic Demand Surge: With India’s market scale, device makers justify local manufacturing (rather than merely export) because local consumption is huge.
- Supply Chain Localization: To reduce import dependency (especially after global supply chain shocks) India is focusing on component manufacturing, packaging & design.
- Strategic Imperatives: Chips & hardware are not just commercial—they’re strategic (for defence, telecom, infrastructure). This elevates priority and funding.
Opportunities & Implications for Businesses
For Startups & OEMs
- Manufacturing opportunities: Lifecycle stretching from chip design → packaging → device assembly opens up for startups and MSMEs.
- Demand for design services, IP development, test/pack services: As Indian fabs come online, there will be demand for tier-2/3 vendors.
- Localization advantage: Firms that build parts locally (PCBs, modules) may gain cost and speed advantages.
For Investors
- Hardware manufacturing in India is becoming investable—not just software. Multibillion-dollar factories are being built.
- Up-trend may continue: industry estimates suggest India’s chip market could reach USD 45-50 billion by end of 2025 and potentially USD 100+ billion by 2030.
For India’s Economy
- Job creation: Manufacturing plants will generate direct and indirect jobs (cleanroom workers, packaging, logistics).
- Import substitution: India currently imports large quantities of chips and components; domestic production will reduce import burden.
- Technology spill-over: Advanced manufacturing encourages R&D, electronics design, skills development, benefitting the broader tech ecosystem.
Challenges That Must Be Navigated
Node & Technology-Gap
While India is building fabs, many currently target mature nodes (28 nm-65 nm). Advanced nodes (<10 nm) remain dominated by Taiwan, US, and South Korea.
Supply Chain & Equipment Dependencies
Semiconductor manufacturing requires sophisticated equipment (lithography, deposition tools) and materials often imported. Scaling these supply chains domestically takes time.
Cost & Scale Economics
Fab construction is capital-intensive. Achieving scale and utilisation is critical; idle capacity is costly. The India models often focus on mature nodes and packaging to reduce risk.
Talent & Skill Gaps
High-precision manufacturing, cleanrooms, chip design require skilled workforce, which India is scaling, but gaps remain.
Time-to-Market
Projects announced years ago are only now reaching production (2025/26 onward). It will take time for impact to fully hit the market.
Strategic Recommendations for Stakeholders
- Focus on niche/maturity nodes: Indian manufacturers and device makers can leverage mid/low-nodes, packaging and modules rather than trying to compete with bleeding-edge immediately.
- Develop local ecosystem: Components, PCBs, modules, test services – build local supply to reduce dependence.
- Enhance R&D & design capabilities: Move beyond manufacturing to design, IP creation so value remains higher.
- Leverage demand clusters: Automotive electronics, EV power chips, telecom hardware, defense electronics all are high-growth and relevant for India.
- Collaborate globally: Partnerships with global foundries, equipment makers, IP firms accelerate capability build-out.
- Ensure sustainability & circularity: As device manufacturing grows, e-waste and sustainability become important—incorporate recycling & sustainable design early.
Conclusion
The industry boom in 2025 in India, especially in chips and devices, is purely structural change and is no longer a hype. Government stimulus, realignment of global supply chains, immense domestic demand, and strategic imperatives all fuel this change. From fab construction to device assembly, India is positioning itself as a global hub in hardware manufacturing.
There are technology gaps, cost, and supply chain dependencies, however, the COVID-19 global pandemic has shown these gaps can be filled, and the country can in fact be a global hardware powerhouse.
For the next decade, as the country continues to innovate and devise new methods in the manufacturing of devices, the country can shift into advanced assembly and ship packaging, and devise new methods to improve global supply chains to which India can develop innovative devices or innovate packaging chips.
- The Times of India
- The Times of India.
- The Times of India