Cabinet Approves Rs 76,000-crore Policy for Development of Semiconductors

• Incentives of INR 2,30,000 crore to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block
  
• Rs.76000 crores (>10 billion USD) approved for the development of semiconductors and display manufacturing ecosystem in India

To take forward the vision of Atmanirbhar Bharat and establish India as a global hub of electronic system design and manufacturing, the Union Cabinet chaired by the Hon’ble Prime Minister Shri Narendra Modi has approved the Development of Sustainable Semiconductor and Display Ecosystem in India.

Comprehensive program approved. Country. The program will usher in a new era in electronics manufacturing by providing globally competitive incentive packages to companies in semiconductor and display manufacturing as well as design. This will pave the way for India’s technological leadership in these areas of strategic importance and economic self-reliance.

Development of semiconductor and Display manufacturing Highlights:

• Incentives of 2.3lakhs crores to position Indian as a global hub
• Rs. 76,000 crores approved for the development of semiconductors and display manufacturing ecosystem
• setting up of Indian semiconductor mission to derive this sector

Benefits 

• Multiple effect acorss diffrent sectors
• deeper integration to the global value chain
• higher domestic value addition in electronics manufacturing
• contribution significantly to achieving a USD 1trillion digital economy and a USD 5 trillion GDP by 2025

Incentives for the development of the Semiconductor and Display Manufacturing

The following broad incentives have been approved for the development of the semiconductor and display manufacturing ecosystem in India:

Semiconductor Fab and Display Fab: The scheme for setting up of Semiconductor Fab and Display Fab in India will provide financial assistance of up to 50% of the project cost to applicants found eligible as well as technology. Ability to execute such highly capital-intensive and resource-intensive projects.

Government of India to approve applications for setting up at least two greenfield semiconductor states to set up hi-tech clusters with the necessary infrastructure in terms of land, semiconductor grade water, high-quality power, logistics, and research ecosystem Will work closely with governments. Fab in the country and two displays fab.

Semi-conductor Laboratory (SCL): The Union Cabinet has also approved that the Ministry of Electronics and Information Technology will take necessary steps for the modernization and commercialization of the Semi-conductor Laboratory (SCL). MeitY will explore SCL’s joint venture with a commercial fab partner for the modernization of the brownfield fab facility.

Compound Semiconductors/Silicon Photonics/Sensors (including MEMS) FABs and Semiconductor ATMP/OSAT Units: Scheme for setting up of Compound Semiconductors/Silicon Photonics/Sensors (including MEMS) FAB and Semiconductor ATMP/OSAT facilities in India will provide financial assistance to the approved units 30% of capital expenditure. Under this scheme, at least 15 such units of compound semiconductors and semiconductor packaging are expected to be set up in collaboration with the government.

Semiconductor Design Companies: The Design Linked Incentive (DLI) scheme will extend product design linked incentives up to 50% of eligible expenditure and product deployment linked incentives of 6% – 4% on net sales for five years.

Support will be provided to 100 domestic companies in Integrated Circuits (ICs), Chipsets, Systems on Chips (SoCs), Systems and IP Cores, and Semiconductor Design associated with Semiconductor Design and facilitate the development of at least 20 such companies. can achieve. 1500 crore plus turnover in the coming five years.

India Semiconductor Mission: To drive long-term strategies to develop sustainable semiconductors and demonstrate the ecosystem, a special and independent “India Semiconductor Mission (ISM)” will be set up. The India Semiconductor Mission will be led by global experts from the semiconductor and display industry. It will act as the nodal agency for the efficient and smooth implementation of schemes on the semiconductors and display ecosystem.

Comprehensive financial support for semiconductors and electronics

With the approval of the Program for Development of Semiconductors and Display Manufacturing Ecosystem in India with an outlay of Rs 76,000 crore (>10 billion USD), the Government of India has announced incentives for every part of the supply chain, including electronic components. sub-assembly, and finished goods. Incentive assistance of Rs 55,392 crore (USD 7.5 billion) has been approved for PLI for large-scale electronics manufacturing, PLI for IT hardware, Specs Scheme, and Modified Electronics Manufacturing Clusters (EMC 2.0) scheme.

In addition, PLI incentives amounting to Rs 98,000 crore (USD 13 billion) have been approved for allied sectors including ACC batteries, auto components, telecommunications and networking products, solar PV modules, and white goods. Overall, the Government of India has given Rs. 2,30,000 crore (USD 30 billion) to establish India as a global hub for electronics manufacturing with semiconductors as the basic building block.

In the current geopolitical scenario, reliable sources of semiconductors and displays hold strategic importance and are vital to safeguarding critical information infrastructure. The approved program will spur innovation and build in-house capabilities to ensure India’s digital sovereignty. It will also create highly skilled employment opportunities to tap the demographic dividend of the country.

The development of the semiconductor and display ecosystem will have a multiplier effect across various sectors of the economy with deeper integration with the global value chain. The program will promote high household value addition in electronics manufacturing and contribute significantly to achieving a USD 1 trillion digital economy and a USD 5 trillion GDP by 2025.