India's Engineering Hardware Industry Poised for Billion-Dollar Growth, New Report Reveals

India's engineering hardware industry is on track to reach $296 billion by 2034, according to a new report launched today at the ICONN Summit 2025. The Engineering Hardware Industry Startup Ecosystem Report, developed by the Confederation of Indian Industry (CII), KPMG, and Synopsys Inc., presents the first comprehensive analysis of India's hardware innovation landscape.

The report draws on insights from over 100 engineering and hardware startups across cleantech, defense, electronics, and advanced manufacturing sectors. It identifies critical barriers to growth while outlining strategic recommendations for startups, investors, and policymakers to accelerate India's progress toward the Viksit Bharat 2047 vision.

Key Challenges Identified

Access to resources remains a significant hurdle for hardware startups. The report found that 53% of startups struggle with access to digital tools, while 55% face difficulties obtaining affordable digital design technologies. Infrastructure limitations were cited by 52% of respondents as a major constraint.

The talent shortage emerged as another critical issue, with 67% of startups identifying the lack of technically trained professionals as a key challenge. Meanwhile, 73% of respondents highlighted funding accessibility, particularly for early-stage ventures, as a pressing concern despite expanding opportunities in the investment landscape.

Strategic Recommendations

The report proposes establishing specialized testing facilities, fabrication labs, and prototyping centers through public-private partnerships to address infrastructure gaps. For talent development, it recommends virtual training programs using mixed reality devices and closer collaboration between academia and industry to provide real-world experience to students.

To improve funding access, the report calls for dedicated investment vehicles targeting hardware startups, including support from venture capital firms, angel investors, corporate venture arms, and government-backed entities. Early-stage capital and investor matchmaking services are emphasized as critical enablers.

C K Ranganathan, Co-Chairman of CII National Startup Council, emphasized the report's significance in advancing India's global competitiveness. "Deep-tech and hardware innovation will serve as vital drivers in achieving global leadership in manufacturing and technology," he stated.

Murali Pullela, Area Sales Director at Synopsys Inc., highlighted the importance of access to advanced simulation and design tools. "Strategic interventions are the need of the hour to unlock the sector's full potential," he said, noting Synopsys's commitment to empowering startups with advanced capabilities.

Roadmap for Growth

For startups, the report recommends focusing on value-added partnerships, enhancing digital capabilities, and prioritizing sustainable product development to achieve long-term differentiation and scalability.

Policymakers are urged to strengthen partnerships between academia and industry, improve regulatory support mechanisms, and establish robust intellectual property protection frameworks to create a favorable environment for innovation and commercialization.

Investors and institutions are encouraged to adopt outcome-oriented funding mechanisms and provide patient capital, recognizing the longer development cycles inherent to deep-tech and hardware ventures.

The ICONN Summit 2025 brings together corporate companies, investors, and startups to foster partnerships driving India's innovation-led and sustainable growth. The Engineering Hardware Industry Startup Ecosystem Report aims to serve as a catalyst for dialogue and strategic action in positioning India as a global hub for engineering innovation.