India could see its next phase of industrial growth come from six sectors attracting fresh investment and policy support, according to global brokerage Jefferies.
The sectors are space, semiconductors, data centres, electronics, solar manufacturing and aerospace.
Jefferies has described this shift as India’s new industrial revolution in its latest India Equity Strategy report.
The brokerage expects India’s data centre capacity to rise from about 2 GW to nearly 10 GW over the next five years. The expansion could require about $45 billion in investment.
India’s space economy could also grow to $40 billion to $45 billion by 2030 from about $8.4 billion in 2023, according to Jefferies.
According to the report, the semiconductor sector has already attracted around $20 billion of investment, while the government is backing a second phase of its semiconductor programme with an outlay of about $13 billion.
Jefferies said the combination of government policy, private investment, a large domestic market and India’s existing manufacturing base is creating opportunities in these six industries.
Data centres could attract $45 billion
Data centres are likely to be one of the largest investment opportunities.
India’s colocation data centre capacity has grown about fivefold in the past five years to around 2 GW.
Jefferies expects capacity to rise another fivefold to nearly 10 GW over the next five years.
The brokerage estimates that this expansion could require about $45 billion in facility capital expenditure.
It also sees a potential revenue opportunity of about $9 billion for data centre operators.
The impact would not be limited to data centre companies. The expansion could create demand for construction companies, real estate developers, power equipment suppliers, cooling systems and network infrastructure.
The growth of cloud services and the increasing use of artificial intelligence are also expected to raise demand for computing infrastructure.
The growth of cloud services and the increasing use of artificial intelligence are also expected to raise demand for computing infrastructure.
Space industry targets fivefold growth.
The space economy is another major opportunity highlighted by Jefferies.
India opened the space sector to private companies in 2020. Since then, startups have entered areas including launch services, satellite technology, earth observation and other space-based applications.
Jefferies said the government is targeting growth in the space economy from about $8.4 billion in 2023 to $40 billion to $45 billion by 2030.
That would represent an expansion of about five times in seven years.
The brokerage highlighted companies such as Skyroot Aerospace, Pixxel, Agnikul Cosmos and Digantara as examples of the growing private-sector space industry.
The focus is also changing. The industry is moving from early-stage technology development towards commercial operations.
Semiconductor investment moves into execution.
India is also trying to build a semiconductor industry from the ground up.
Jefferies estimates that around $20 billion of investment has already been triggered in the sector.
This includes a semiconductor fabrication plant under construction and several projects for assembly, testing and packaging of chips moving towards production.
The government has launched a second phase of its semiconductor incentive programme with an outlay of about $13 billion.
The aim is to build a wider ecosystem around chip manufacturing. This includes chip design, semiconductor equipment, materials, advanced packaging, research and development and skilled workers.
Jefferies said India is building the foundations of a semiconductor ecosystem.
It also pointed to challenges. India still needs deeper supply chains and more specialised talent. It also faces strong competition from countries that already have established semiconductor industries.
Source: Firstpost
