Six Emerging Sectors Set to Power India’s Next Industrial Growth Wave: Jefferies

India’s push to become a developed economy by 2047 could be powered by a new generation of industries, with global investment bank Jefferies identifying six high-growth sectors that it believes could form the backbone of the country’s next industrial expansion.

According to the Jefferies report, India’s vast domestic market, increasing private-sector participation and sustained government support are helping new industries move beyond the policy stage towards building domestic capacity and competing in global markets.

The six sectors identified in the report are space, semiconductors, data centres, electronics manufacturing, solar energy and aerospace.

Jefferies said a combination of policy reforms and targeted incentives is accelerating investment across these industries. Measures such as opening the space sector to private companies, tax incentives for data centres, production-linked and other incentive schemes for semiconductors, electronics and solar manufacturing, localisation policies and government purchases of GPUs are helping create demand as well as domestic capabilities.

In the space sector, India has emerged as one of a limited number of countries with globally competitive capabilities. The country's space economy is expected to expand around five-fold to $40-45 billion by 2030, with private companies such as Skyroot Aerospace, Pixxel and Agnikul Cosmos increasingly moving from technology development towards commercial operations.

The semiconductor industry is another major area of expansion. Jefferies noted that India’s efforts are now moving from policy announcements to actual project execution, with investments of around $20 billion, a semiconductor fabrication plant under construction and several outsourced semiconductor assembly and test (OSAT) projects moving towards production.

The report said a further $13 billion incentive programme could help strengthen the semiconductor ecosystem by supporting manufacturing, packaging and related supply chains.

India’s data-centre industry is also expanding rapidly. Capacity has increased five-fold over the past five years to around 2 GW, and Jefferies expects it to reach 10 GW over the next five years. This expansion could generate an estimated $45 billion investment opportunity spanning electricity infrastructure, cooling systems, construction and network connectivity.

In electronics manufacturing, India is attempting to move beyond its traditional role as an assembly base by increasing domestic value addition and developing component manufacturing capabilities. Jefferies expects the share of locally added value in mobile-phone components to increase from less than 20 per cent currently to around 50 per cent over the next six years.

Solar manufacturing represents another major growth area. India has become the world’s second-largest solar photovoltaic manufacturing base, with around 35 GW of solar cell capacity already operational and another 100 GW under construction.

Jefferies expects localisation across the solar value chain to reach about 90 per cent by 2030, potentially reducing dependence on imported components while strengthening India’s position in the global renewable-energy supply chain.

The aerospace sector is also benefiting from a widening global gap between demand and available manufacturing capacity. India’s relatively competitive production costs, large engineering talent pool and growing manufacturing capabilities are positioning the country to capture a larger share of global aerospace supply chains.

Boeing and Airbus currently source products and services worth around $1.4-1.6 billion annually from India. Jefferies said Indian companies are increasingly supplying global original equipment manufacturers and Tier-1 aerospace companies, indicating growing integration with international supply chains.

Taken together, the six sectors point to a broader shift in India’s industrial strategy — from relying primarily on traditional manufacturing and services to building capabilities in strategically important, technology-intensive industries.

Jefferies believes the combination of domestic demand, private investment and government-backed industrial policies could help these sectors become important contributors to India’s long-term economic growth and global competitiveness.