The Union Cabinet on Wednesday approved a massive Rs 76,000 crore (over $10 billion) incentive package for semiconductor (chips) and display board production in the country, I&B Minister Anurag Thakur said.
This includes a scheme for setting up of Semiconductor Fabs and Display Fabs in India under which fiscal support of up to 50% of project cost will be given to companies that have the technology as well as capacity to execute such highly capital intensive and resource incentive projects, according to an official statement.
In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure, the government statement said.
The objective is to develop India into a leading electronics manufacturing hub in furtherance of PM Modi’s vision of Aatmanirbhar Bharat.
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The Government has announced incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.
The programme aims to provide attractive incentive support to companies / consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT), Semiconductor Design.
Semi-conductor Laboratory (SCL): Union Cabinet has also approved that Ministry of Electronics and Information Technology will take requisite steps for modernization and commercialization of Semi-conductor Laboratory (SCL).
Broad incentives:
The Scheme for Setting up of Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs and Semiconductor ATMP / OSAT facilities in India shall extend fiscal support of 30% of capital expenditure to approved units. At least 15 such units of Compound Semiconductors and Semiconductor Packaging are expected to be established with Government support under this scheme.
Semiconductor Design Companies: The Design Linked Incentive (DLI) Scheme shall extend product design linked incentive of up to 50% of eligible expenditure and product deployment linked incentive of 6% – 4% on net sales for five years.
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India Semiconductor Mission: 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.
Incentive support to the tune of Rs 55,392 crore (7.5 billion USD) has already been approved under 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 to the tune of Rs.98,000 crore (USD 13 billion) are approved for allied sectors comprising ACC battery, auto components, telecom & networking products, solar PV modules and white goods.
In total, Government of India has committed support of Rs. 2,30,000 crore (USD 30 billion) to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block, the official statement explained.
The program will promote 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 official statement added.
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