- October 14, 2025
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The Chip Rush: How Central India is Poised to Power the Next Wave of Electronics Manufacturing
Introduction: The Dawn of a New Industrial Era
India is in the midst of an unprecedented manufacturing renaissance, and its heartbeat is the Electronics System Design and Manufacturing (ESDM) sector. Fueled by strategic government policies and a global push to diversify supply chains, the nation is rapidly transforming from an electronics importer to a global production powerhouse. While established hubs have led the initial charge, the next wave of growth is set to emerge from the heart of the country. Central India, with its strategic location, burgeoning infrastructure, and rich talent pool in cities like Indore, Bhopal, Jabalpur, and Gwalior, is uniquely positioned to capture this opportunity. This isn’t just about assembling phones; it’s about building a resilient, end-to-end ecosystem for the chips that power our future, and Central India is ready to log in.
What’s Happening: Policy, Production, and Potential
The Indian government’s vision is clear: position India as a global hub for ESDM. This ambition is backed by a suite of powerful policies. The Production Linked Incentive (PLI) Scheme, with an outlay of ₹1.97 lakh crore across 14 sectors, has been a game-changer for large-scale electronics manufacturing. As of June 2025, the scheme has already attracted investments worth ₹13,107 crore and generated exports touching ₹4.65 lakh crore. Complementing this are initiatives like the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), which provides a 25% financial incentive on capital expenditure, and the Modified Electronics Manufacturing Clusters (EMC 2.0) scheme, designed to build world-class infrastructure.
This policy push is yielding remarkable results. India now has over 300 mobile phone manufacturing facilities, a massive leap from just two in 2014. The national goal is to achieve a USD 400 billion electronics manufacturing turnover by 2025. Crucially, this growth is intentionally being decentralized. The government’s Vision 2047 explicitly targets 1,039 towns, aiming to shift manufacturing focus from saturated Tier-1 hubs to high-potential Tier-2 and Tier-3 cities. This strategy recognizes that for long-term, scalable growth, India must de-risk its overdependence on traditional hubs and cultivate new centers of excellence.
Why It Matters: The Trillion-Dollar Opportunity for Founders
For entrepreneurs, investors, and mentors in Central India, this national strategy is more than just policy—it’s a powerful tailwind. The focus on Tier-2 cities creates a unique competitive advantage. Founders in Indore or Bhopal can benefit from lower operational costs, reduced talent attrition, and significant government incentives designed specifically to attract early investors to these new hubs. The global semiconductor market is projected to be a trillion-dollar industry by 2030, and India’s share is expected to grow from $54.3 billion in 2025 to $135 billion by 2030. Capturing even a fraction of this market can create immense value.
For investors, the opportunity lies in getting in on the ground floor of what could be the next Bengaluru or Hyderabad for hardware. The government’s clear intent to diversify the semiconductor industry, evidenced by the approval of 10 projects under the India Semiconductor Mission (ISM) with investments of around ₹1.60 lakh crore across six states, signals strong state backing and reduces investment risk. For mentors and ecosystem builders like TiE, the mission is to guide local startups in navigating this complex but rewarding landscape, connecting them with the capital, expertise, and networks needed to build world-class ESDM companies from the heart of India.
How Startups Can Respond: An Actionable Framework
The opportunity is vast, but success requires a strategic approach. Startups in Central India should focus on carving out a niche within the expansive ESDM value chain. Rather than competing head-on with global giants in chip fabrication, founders can target high-growth adjacent areas.
Strategic Focus Areas for Central India’s ESDM Startups
| Focus Area | Description | Local Advantage | Example Application |
|---|---|---|---|
| Fabless Chip Design | Designing semiconductors and outsourcing manufacturing. This is less capital-intensive and relies on skilled engineering talent. | Access to talent from IIT Indore, GSITS, and other top engineering colleges. | Developing custom AI/ML chips for the automotive or AgriTech sectors. |
| ATMP Services | Assembly, Testing, Marking, and Packaging. This is a critical downstream part of the semiconductor supply chain. | Proximity to industrial corridors and logistics hubs like Pithampur. Lower land and labor costs. | Providing specialized packaging services for imported wafers. |
| Power Electronics & EV Components | Manufacturing components like inverters, chargers, and Battery Management Systems (BMS) for the booming EV market. | Strong automotive manufacturing base in the region and state-level EV policies. | Building modular powertrain kits for retrofitting commercial vehicles. |
| Embedded Systems & IoT | Developing integrated hardware and software for specific functions within larger systems, especially for industrial and smart city applications. | Indore’s Smart City projects and the industrial base provide a ready market for IoT solutions. | Creating smart sensors for water management in agricultural applications. |
Founders should actively leverage government schemes. Applying for support under SPECS for capital expenditure or setting up units in proposed EMC 2.0 clusters can provide a significant financial runway. Networking through organizations like TiE Indore MP is crucial to connect with mentors who have experience in hardware manufacturing and to gain access to angel investors looking to diversify their portfolios into this strategic sector.
The Local Lens: Indore and Bhopal as Emerging ESDM Hubs
Central India is not starting from scratch. The region possesses a robust foundation of infrastructure and talent. Indore, with its Super Corridor, Crystal IT Park, and the Electronics Complex in Pardeshipura, offers ready-to-move infrastructure. The proximity of premier institutions like IIM Indore and IIT Indore ensures a steady supply of managerial and technical talent. Bhopal, the state capital, complements this with its own IT parks managed by MPSEDC and a strong policy-making apparatus.
Companies like CIS, with their focus on AI-driven solutions, and Emorphis Health, working on health-tech hardware, demonstrate the region’s existing capabilities in deep tech. The challenge now is to pivot this expertise towards the core ESDM sector. Incubators such as AIC-PRESTIGE and IITI DRISHTI can play a pivotal role by creating specialized programs for hardware startups, providing them with expensive testing equipment and mentorship. The upcoming TiE Con MP is the perfect platform for aspiring ESDM entrepreneurs to connect with investors and policymakers, turning this potential into reality. It’s about creating a cohesive ecosystem where a fabless design startup from an incubator at SGSITS can collaborate with an ATMP unit in the Pithampur industrial area. “अब वक्त है, अपने शहर में ही दुनिया के लिए बनाने का।” (Now is the time to build for the world, right from our own city.)
Takeaways: A TiE Mentoring Perspective
From a TiE mentoring standpoint, the path for an ESDM startup is challenging but clear. First, founders must develop deep domain expertise; hardware is not as forgiving as software. Second, building a strong, multi-disciplinary team with skills in electronics engineering, supply chain management, and finance is non-negotiable. Third, startups must think about global standards and certifications from day one to compete in the export market. Finally, patience is key. Hardware product development cycles are long, and capital requirements are high. Founders need to build relationships with investors who understand the dynamics of deep-tech manufacturing. Programs like TiE Nurture are designed to provide this long-term, patient guidance, helping founders navigate the journey from prototype to production.
Conclusion: Building India’s Silicon Heartland
The global realignment of supply chains and India’s determined policy push have created a once-in-a-generation opportunity in electronics manufacturing. The question is no longer if India will become a major player, but where within India the next hubs will emerge. With its strategic advantages, growing infrastructure, and untapped potential, Central India has a compelling claim to become the nation’s ‘Silicon Heartland’. For the entrepreneurs, engineers, and innovators of Indore, Bhopal, and beyond, the message is clear: the chip rush is on, and the time to build is now. By fostering collaboration, embracing deep tech, and leveraging the powerful support of the ecosystem, Central India can move from the periphery to the very core of the world’s electronics value chain.
About the Author
Amit Agrawal — Treasurer. Treasurer: Founder & COO of Cyber Infrastructure (P) Ltd. “CIS”; champion of AI-Enabled, tech-driven, global solutions and entrepreneurship; AI-First Mid-Sized Software Partner Scaling Enterprise Innovation; MIT & IIM Alum; Author: Scaling in the Age of AI; Featured in: Forbes, YourStory, TiE; Patented-Innovator; Mentor; Investor.
