The Confederation of Indian Industry (CII), together with KPMG and Synopsys Inc, has released India’s first in-depth Engineering Hardware Industry Startup Ecosystem Report at the ICONN Summit 2025. The study outlines how engineering hardware is emerging as a major growth frontier, with the sector expected to reach USD 296 billion by 2034. It maps India’s fast-evolving hardware innovation landscape, examines existing roadblocks, and presents practical recommendations for startups, investors, institutions, and policymakers working toward the Viksit Bharat @2047 vision.
C K Ranganathan, Co-Chairman of the CII National Startup Council, noted that the report underlines the strategic role of deep-tech and hardware innovation in India’s long-term growth. He emphasized that the whitepaper provides a clear direction to accelerate innovation, enhance competitiveness, and strengthen the foundation for India’s future as a global manufacturing and technology leader.
Drawing insights from more than 100 engineering and hardware startups across sectors such as electronics, defense, cleantech, and advanced manufacturing, the report evaluates market opportunities, investment flows, and future expansion prospects. It also identifies major constraints and suggests actionable measures to unlock faster innovation and stronger collaboration across the ecosystem.
Synopsys Area Sales Director, Murali Pullela, highlighted the crucial role of advanced design and simulation technologies in enabling hardware startups to scale. He pointed out that limited access to digital tools and affordable design solutions remains one of the biggest hurdles for new ventures, and noted Synopsys’ commitment to supporting innovators in overcoming these gaps.
The report stresses that India’s engineering hardware segment is entering a transformative phase powered by coordinated efforts between industry, startups, academia, and investors. It outlines pathways to stimulate investment, strengthen R&D capabilities, and build globally competitive hardware ventures.
The report identifies a significant gap in infrastructure and technology access, with more than half of surveyed startups pointing to the lack of dedicated hardware facilities. To address this, it recommends the creation of testing laboratories, prototyping hubs, and fabrication units developed through coordinated efforts between government bodies and private enterprises.
Despite the growing number of funding opportunities, early-stage hardware ventures continue to struggle with capital accessibility. Nearly three-quarters of respondents highlighted this hurdle. The report proposes the formation of sector-specific investment funds, government-backed financing channels, and structured investor–startup matchmaking platforms to ease the fundraising journey.
A shortage of qualified engineering talent remains another critical barrier, with 67% of startups reporting difficulty in finding technically skilled professionals. To bridge this gap, the report advocates for immersive training modules, practical industry-led workshops, and deeper ties between educational institutions and industry to shape a workforce equipped for hardware innovation.
For startups, the report underscores the need to build strong digital capabilities, cultivate strategic partnerships, and embed sustainability into product design. These steps are seen as essential for creating long-term differentiation and scaling successfully in a competitive market.
For policymakers, the recommendations focus on building a supportive ecosystem that encourages innovation and smoothens commercialization. Key priorities include enhancing collaboration between academia and industry, improving regulatory frameworks, and reinforcing intellectual property protection.
For investors and institutions, the report emphasizes the value of patient capital and outcome-driven funding strategies. By adopting investment models with longer gestation horizons and focusing on measurable impact, financiers can play a pivotal role in accelerating deep-tech and hardware-led growth.
The jointly developed report aims to spark informed dialogue and provide a foundation for coordinated action to position India as a world-class destination for engineering hardware innovation. The Confederation of Indian Industry (CII) works with government, industry, and civil society to foster an environment conducive to national development through consultative and advisory efforts.
Synopsys, Inc (Nasdaq: SNPS) is a global leader in engineering solutions ranging from silicon design to system-level development. The company provides advanced design tools, IP, simulation platforms, and engineering services, enabling customers to accelerate innovation across sectors and build future-ready technologies.
