India's new industries have shifted from setting ambitious targets to establishing factories and gaining paying customers. However, India mainly excels in the final assembly steps, while much of the high-value components are still imported. This article examines six key industries—electronics, solar, aerospace, semiconductors, space, and data centres—to understand what companies are building, signing, and shipping as part of India’s next industrial push.
- India leads in solar module capacity, second only to China, but upstream components remain mostly imported.
- Electronics manufacturing is growing, with local production increasing beyond assembly to components like displays and batteries.
- Aerospace exports have grown, with India moving into final assembly and engine maintenance.
- Semiconductor packaging is underway, but full chip manufacturing is still developing.
- Private space companies have launched satellites and secured commercial orders, marking new growth beyond ISRO.
- Data centre capacity is expanding rapidly, driven by major global tech companies.
What progress has India made in electronics manufacturing?
India produced electronics worth about ₹12.1 lakh crore in FY26, with exports growing five-fold in five years. Yet, a typical India-made phone has less than 15% local value addition, and 85–90% of circuit boards are imported. The Electronics Component Manufacturing Scheme has approved 106 projects worth ₹69,548 crore, covering 30 product categories across 15 states. Thirty-eight plants are operational, and sixteen more are close to starting production. Companies are now producing displays, batteries, camera modules, phone casings, and servers. This shift aims to reduce dependence on imports and build a more complete supply chain.
How is India advancing in solar energy manufacturing?
India has about 156 GW of solar module capacity, second only to China. However, the manufacturing capacity decreases sharply upstream: 35 GW for cells and almost none for wafers or polysilicon. Industry investments aim to fill these gaps, with cell capacity expected to reach 130 GW by the end of 2027 and ingot and wafer capacity around 60 GW by 2028. Despite strong ambitions, economic challenges exist, such as low module margins and high costs for integrated ingot-to-cell production. Polysilicon remains mostly imported, posing a key challenge.
What developments are occurring in aerospace manufacturing?
India's aircraft and parts exports grew from $1.4 billion in FY20 to $7 billion in FY25. Recently, the sector has moved beyond machined parts to final assembly and engine maintenance. Notable progress includes assembling helicopters, servicing jet engines, and securing long-term contracts for flight-critical parts. The Aequs deal expanded work to six Safran units and flight-critical components, which require long certification processes but offer lasting opportunities. Challenges include reliance on imported engines and specialized alloys, and fluctuating aircraft production rates.
What is the status of semiconductor manufacturing in India?
One year ago, India had no commercial chip plants. Now, memory chips finished in Gujarat are used in Dell and HP laptops. India currently focuses on chip packaging, which involves cutting, testing, and assembling chips made elsewhere. This stage helps build skills and supplier networks but captures only a small part of chip value. The first commercial wafer fabrication plant under construction in Dholera will be a critical milestone to demonstrate full chip manufacturing capability. Semiconductor plants are expensive and depend heavily on subsidies, with packaging margins sensitive to global market cycles.
How is the private space sector evolving in India?
Until recently, Indian space activities were dominated by ISRO. Since 2020, private companies have entered the sector. A Hyderabad startup launched satellites on its own rocket and secured commercial launch contracts. The private space economy is still small, with about $0.6 billion raised by 400+ startups, compared to the $8.4 billion overall space economy in 2023. The government's $40–45 billion target for 2030 is ambitious. The key challenge is achieving repeatable rocket launches and sustainable revenue from customers rather than funding.
What is happening in India’s data centre industry?
India’s data centre capacity has grown from 404 MW in 2019 to an estimated 2,076 MW in 2026, with projections reaching 9,576 MW by 2031. Major global tech companies have committed billions of dollars to build or lease data centre capacity in India. The main challenges are securing power, water, land, and fibre infrastructure quickly. Announced projects become meaningful only when fully built, powered, and operational. If artificial intelligence demand grows slower than expected, some capacity may remain underused.
What are the key challenges across these industries?
India’s industrial growth faces several risks. Many projects depend on government incentives that may reduce over time. Machinery and expertise often come from China and East Asia. High-value inputs like chips, displays, solar wafers, engines, and polysilicon are still mostly imported. Certification processes, especially in aerospace, are lengthy. Overcapacity risks exist in solar manufacturing, and semiconductor fabs require significant investment and foreign partnerships. The space sector’s success depends on reliable launches and customer revenue. Infrastructure bottlenecks can delay data centre projects.
How do these industries support each other?
Strength in one industry creates demand and supply opportunities for others. For example, semiconductor packaging supports electronics manufacturing, while data centres drive demand for servers and chips. Solar manufacturing growth can benefit from advances in materials and components. However, the entire industrial chain is only as strong as its weakest imported link. India’s future as an industrial powerhouse depends on moving up the value chain and reducing reliance on imports.
