Indian Government Approves Rs 76,000 Crores for Semiconductor Industry in India, Industry Reacts

Indian Government has allocated Rs 76,000 crores to position India as global hub for electronics manufacturing with semiconductors

The Indian Government, in what can be termed as a landmark move, has approved India Semiconductor Mission (ISM) for the development of sustainable semiconductor and display ecosystem in the country. The programme aims to provide attractive incentive support to companies or consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors or Silicon Photonics and Sensors (including MEMS) Fabs, Semiconductor Packaging, and Semiconductor Design. 

With the approval of the programme for development of semiconductors and display manufacturing ecosystem in India with an outlay of Rs 76,000 crore Government of India has announced incentives for every part of supply chain including electronic components, sub-assemblies, and finished goods. 

“Electronics & Semiconductors have become the most critical meta-technologies for growth of the economy, all the industry verticals, day-2-day life and agents for social transformation of masses. We are very pleased that Governments of India has come out with a comprehensive and progressive policy addressing Semiconductor Product Design, Manufacturing and Research with Rs 76,000 Crore allocation. The focus on Silicon Logic Fab, Display Fab, Compound Semiconductors Fab, packaging, Semiconductor-products-design and Research will help in creating a vibrant and sustainable ecosystem in India leveraging the already existing semiconductor design capabilities. This is first time government is providing significant incentives for Semiconductor product Design called Design Linked Incentives (DLI) giving incentives for product development and product deployment to create Indian chips level products. The year-long effort by the Meity team in consultation with Invest India, other ministries, Domestic & Global industry and Academia has resulted in a policy covering all aspects of the industry and has the required depth of understanding of the global ecosystem. We are looking forward to an effective and timely implementation of the policies, with the help of a professional, experienced management and serious involvement of the eminent domestic and global Indian semiconductor leaders in design and manufacturing of semiconductors. I have involved with most of the efforts for developing semiconductor ecosystem in India for last 15 years and I sincerely feel that the current policy is most comprehensive effort with deep understanding of the requirements of the industry and is the right way forward to create long-term atma-nirbharta in the field of Semiconductor and Electronics,” said Dr Ajai Chowdhry, Founder HCL and Satya Gupta, Advisor-India Electronics & Semiconductor Association.

In total, Government of India has committed support of Rs. 2,30,000 crore (USD 30 billion) to position India as global hub for electronics manufacturing with semiconductors as the foundational building block. “India needed such an audacious goal and an integrated approach to kickstart its semiconductor industry. The current semiconductor shortage has made economies realise the strategic role of these chips in development. India, early on in the game, acknowledged the need to create a semiconductor ecosystem of its own. This ₹76,000 crore investment for a production linked incentive (PLI) scheme towards semiconductor and display board production is a positive move towards uplifting the industry and economy. This policy announcement is significant that it conceives an India Semiconductor Mission and integrates design-to-semiconductor device – in its overall ESDM enablement program. We are hopeful to see the blossoming of the Indian semiconductor industry with these initiatives,” said Srinivas Satya, country president, Applied Materials India.

The program also aims at promoting higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025. “The approval of Rs 76,000-Cr Product-Linked Incentive (PLI) scheme for Semiconductors under which Rs. 2.3 Lakh crore of incentives will be given is a welcome move. This will enable India to become an electronics hub and encourage corporates to start manufacturing in India. It is a big step to bring India on the world map of the semiconductors industry as it will pave the path for the industry to broader the horizon of research, manufacturing and export. In the long-term issues like sudden surge in demand of semiconductors will also be addressed. This move will also make the Indian manufacturers globally competitive to attract investment in the areas of core competency and cutting-edge technology,” Sanjay Gupta, managing director, NXP India.

The Government of India also announced that in order to drive the long-term strategies for developing a sustainable semiconductors and display ecosystem, a specialized and independent “India Semiconductor Mission (ISM)” will be set up. The India Semiconductor Mission will be led by global experts in semiconductor and display industry. It will act as the nodal agency for efficient and smooth implementation of the schemes on Semiconductors and Display ecosystem. "This is a welcome move by the GOI, today the world is struggling for an alternative manufacturing hub for raw materials. This will be a game-changer to create an ecosystem of manufacturing in India. This will encourage investments from all the big players, to make India Atmanirbhar Bharat. As of today, India is completely dependent on other countries, due to which we are facing huge supply constraints and price wars. We believe that this scheme from the govt is one the biggest supports have been given to the manufacturing sector. Now we are moving in phase from assembling to manufacture in India, there will more price stability in consumer electronics products,” said Avneet Singh Marwah, CEO at SPPL (Super Plastronics), India Licensee of Blaupunkt TV in India.