Billion-Dollar Surge: Jefferies Highlights Six Key Sectors Fueling ‘India’s New Industrial Revolution’
Global investment bank Jefferies has released a report titled ‘India’s New Industrial Revolution,’ identifying key sectors poised for growth in India. The report highlights the potential of India’s large domestic market, increased private sector involvement, and supportive government policies. Jefferies points to specific policy measures that are facilitating the expansion of these sectors, including tax incentives for data centres and semiconductors, as well as promoting local manufacturing.
Key Growth Sectors
Jefferies has pinpointed six primary sectors that are expected to drive India’s industrial growth: semiconductors, space, electronics, solar, aerospace, and data centres.
Electronics
The electronics industry in India is evolving beyond basic assembly. Jefferies notes a significant shift towards domestic value addition and component manufacturing. The report forecasts that domestic value addition in mobile components will rise from below 20% to around 50% over the next six years. Initiatives like the Electronics Components Manufacturing Scheme (ECMS) and Mobile 2.0 (MPMS) are expected to enhance backward integration and reduce reliance on imports.
Space
India’s space economy is projected to grow nearly fivefold, reaching $40–45 billion by 2030. The government opened the sector to private participation in 2020, which has led to advancements by startups such as Skyroot, Pixxel, and Agnikul. These companies are moving from innovation to commercial execution, with notable projects like orbital launches and high-resolution observation satellites.
Semiconductors
India’s semiconductor sector is transitioning from policy announcements to tangible execution. Approximately $20 billion is being invested, with a chip fabrication plant under construction and several OSAT projects commencing production. An additional incentive package of around $13 billion is anticipated to bolster the semiconductor ecosystem, despite challenges related to supply chain depth and global competition.
Aerospace
India is well-positioned to capitalize on the global demand-supply gap in aerospace. Cost-competitive manufacturing and skilled engineering talent are key advantages. Currently, Boeing and Airbus source between $1.4 billion and $1.6 billion annually from India. Indian firms are also supplying parts to global OEMs and Tier-1 companies, with notable suppliers including Aezad, BHFC, and MOTHERSON.
Data Centres
India’s data centre capacity has surged fivefold over the past five years, reaching around 2 GW. Jefferies anticipates this capacity will grow to approximately 10 GW in the next five years, creating a $45 billion investment opportunity across power, cooling, construction, and network infrastructure.
Solar
India has emerged as the world’s second-largest solar PV manufacturer, with about 35 GW of cell manufacturing capacity currently operational and an additional 100 GW under construction. Jefferies expects that by 2030, around 90% of the solar value chain will be localized.
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