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India's emerging sectors to drive capex, credit demand towards storage, semiconductors: Report

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India's emerging sectors to drive capex, credit demand towards storage, semiconductors: Report

Business News Tech AI India's emerging sectors to drive capex, credit demand towards storage, semiconductors: Report

India's emerging sectors to drive capex, credit demand towards storage, semiconductors: Report

Financing demand in India's emerging sectors is expected to shift towards battery storage, semiconductor packaging, green hydrogen projects with assured buyers and defence suppliers over the next three to five years, as investments in new growth industries create opportunities for banks, according to a Union Bank of India research report.

Financing demand in India's emerging sectors is expected to shift towards battery storage, semiconductor packaging, green hydrogen projects with assured buyers and defence suppliers over the next three to five years, as investments in new growth industries create opportunities for banks, according to a Union Bank of India research report. The report noted artificial intelligence (AI), semiconductors and defence is likely to lead the investment pipeline, with indicative public and private investments of around Rs 5.9 lakh crore, Rs 5.27 lakh crore and Rs 5.07 lakh crore, respectively. It said financing opportunities would increasingly emerge in advanced packaging and assembly of semiconductors, battery recycling, lithium iron phosphate (LFP) and sodium-ion battery capacity, storage infrastructure and component suppliers to the defence industry.

The report also highlighted the potential for financing hydrogen projects backed by assured offtake agreements, while demand for data centres is expected to expand towards edge and colocation facilities as AI inference grows. However, the report cautioned that technology obsolescence, uncertain revenues, delayed payments and long investment payback periods remain significant risks for lenders.


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