New Delhi

Indiais entering a new phase of industrialisation as rising domestic demand and government support draw private capital into emerging sectors including space, semiconductors, data centres, electronics and solar manufacturing, brokerage Jefferies said in a report.

The government has backed the push through measures including opening the space sector to private companies, tax incentives for data centres, large production-linked schemes for semiconductors, electronics and solar, localisation requirements and purchases of GPUs.

The resulting investment cycle is creating opportunities not only in end-product manufacturing but also across domestic supply chains, components, infrastructure and engineering services, it said.

On the space sector, Jefferies said India is among a handful of spacefaring nations with globally competitive capabilities. The government opened the sector to private participation in 2020 and is targeting an almost five-fold expansion of the space economy between 2023 and 2030, to about $40 billion-$45 billion.

Indian startups are increasingly moving from early-stage innovation toward commercial execution.

Skyroot successfully conducted its first orbital launch in July, while Pixxel is developing high-resolution earth-observation satellites. Agnikul is working on 3D-printed rocket engines and Digantara is developing satellite-based space-surveillance capabilities.

The shift is broadening private-sector participation beyond satellite services into launch vehicles, propulsion, earth observation and space situational awareness.

The brokerage said India's semiconductor ambitions are moving from policy planning toward execution, with about $20 billion of investments announced or underway, including a chip fabrication plant under construction and several outsourced semiconductor assembly and test (OSAT) projects moving toward production.

A new incentive plan worth about $13 billion is expected to further expand the ecosystem and increase domestic value addition, including in chip design.

Supply-chain depth, availability of skilled talent and competition from established semiconductor hubs remain challenges. But the investment pipeline is laying the foundations for a domestic semiconductor manufacturing ecosystem.

On the data-centre industry, it said India has emerged as a strategic digital-infrastructure segment, with co-location capacity rising five-fold over the past five years to about 2 gigawatts.

Cloud adoption, digitisation and data-localisation requirements are driving demand. Capacity could expand another five-fold to about 10 GW over the next five years, supported by favourable cost economics, policy measures and rising demand from hyperscalers.

That expansion could represent about $ 9 billion in revenue for data-centre operators and roughly $ 45 billion of investment across power, cooling, construction and network infrastructure, according to the report.