India Graphics Processing Unit (GPU) Market Outlook to 2028

India Graphics Processing Unit (GPU) Market Overview

The India Graphics Processing Unit (GPU) market has experienced significant growth, reaching a valuation of USD 115 million. This expansion is primarily driven by the increasing demand for high-performance computing across various sectors, including artificial intelligence, machine learning, and data analytics. The proliferation of cloud-based solutions and the rising adoption of advanced technologies in industries such as healthcare, automotive, and finance further fuel this market growth.

Major technology hubs such as Bengaluru, Hyderabad, and Pune dominate the GPU market in India. These cities host numerous IT and tech companies that drive the demand for cloud GPU services, contributing to their market dominance.

India imposes import tariffs on various electronic components, including those essential for GPU manufacturing. For instance, in the 2023-24 budget, tariffs were increased on items such as plastic goods and high-gloss paper, which are integral to electronic packaging and manufacturing processes. These tariffs can elevate production costs for GPU manufacturers relying on imported components, potentially affecting the overall pricing and competitiveness of GPUs in the Indian market.

India Graphics Processing Unit (GPU) Market Segmentation

By Type: The market is segmented by type into Dedicated GPUs, Integrated GPUs, and Hybrid GPUs. Dedicated GPUs hold a dominant market share due to their superior performance capabilities, making them essential for intensive tasks like gaming, professional design, and scientific computations. Their ability to handle complex graphical processing efficiently positions them as the preferred choice among professionals and enthusiasts.

By Device: The market is further segmented by device into Smartphones, Tablets, Notebooks, Workstations, and Gaming Consoles. Notebooks have emerged as the leading sub-segment, driven by the increasing demand for portable computing solutions that do not compromise on performance. The integration of high-performance GPUs in notebooks caters to professionals requiring mobility without sacrificing computational power, thereby boosting their market share.

India Graphics Processing Unit (GPU) Market Competitive Landscape

The India GPU market is characterized by the presence of both global and local players, contributing to a competitive environment. Key companies include NVIDIA Corporation, Advanced Micro Devices (AMD), Intel Corporation, Qualcomm Incorporated, and Samsung Electronics Co., Ltd. These companies leverage their extensive product portfolios, strong distribution networks, and continuous innovation to maintain their market positions.

India Graphics Processing Unit (GPU) Market Analysis

Growth Drivers

Proliferation of AI and Machine Learning Applications: India's rapid adoption of artificial intelligence (AI) and machine learning (ML) is significantly driving the demand for GPUs. In 2024, 59% of Indian enterprises with over 1,000 employees have actively deployed AI in their operations, the highest among countries surveyed. This widespread integration of AI and ML technologies necessitates advanced computational capabilities, thereby boosting the GPU market.

Expansion of the Gaming Industry: India's gaming sector is experiencing substantial growth, with the market projected to reach $9.2 billion by the fiscal year 2028-29, up from $3.8 billion in FY24. This surge is driven by a 23% growth in FY24, fueled by advertisement revenue and in-app purchases. The increasing number of gamers, which reached 590 million in FY24, and the rising demand for high-quality graphics are propelling the need for advanced GPUs to enhance gaming experiences.

Rise in Data Centers and Cloud Computing: The proliferation of data centers and cloud computing services in India is escalating the demand for GPUs. Companies like Lenovo have announced plans to manufacture AI servers in India, aiming to produce 50,000 AI rack servers and 2,400 GPU servers annually for local consumption and export. This expansion underscores the growing need for GPUs to support data-intensive applications and cloud-based services.

Market Challenges

High Manufacturing Costs: The production of GPUs involves complex processes and advanced materials, leading to elevated manufacturing costs. In India, the lack of a robust semiconductor manufacturing ecosystem exacerbates this issue, resulting in reliance on imports and increased expenses. The government's efforts to promote local manufacturing through initiatives like the Production Linked Incentive (PLI) scheme aim to mitigate these challenges, but significant hurdles remain.

Supply Chain Disruptions: Global supply chain disruptions, exacerbated by events like the COVID-19 pandemic, have impacted the availability of critical components for GPU manufacturing. India's dependency on imports for semiconductor components makes it vulnerable to such disruptions, leading to delays and increased costs in GPU production and distribution.

India Graphics Processing Unit (GPU) Market Future Outlook

Over the next five years, the India GPU market is expected to exhibit substantial growth, driven by the increasing adoption of artificial intelligence, machine learning, and data analytics across various industries. The expansion of cloud computing services and the proliferation of IoT devices are anticipated to further fuel demand for high-performance GPUs. Additionally, government initiatives promoting digital transformation and local manufacturing are likely to create favorable conditions for market expansion.

Future Market Opportunities

Integration with IoT Devices: The Internet of Things (IoT) ecosystem in India is expanding, with a growing number of connected devices across various sectors. Integrating GPUs into IoT devices can enhance processing capabilities, enabling real-time data analysis and improved performance. This presents a significant opportunity for GPU manufacturers to cater to the burgeoning IoT market in India.

Development of AR and VR Technologies: Augmented Reality (AR) and Virtual Reality (VR) technologies are gaining traction in India, particularly in sectors like gaming, education, and healthcare. These technologies require robust graphical processing capabilities, creating a demand for advanced GPUs. The development and adoption of AR and VR applications offer lucrative opportunities for GPU market expansion in the country.
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