India intends to produce semi-conductors for the rest of the globe, with a holistic approach to the industry’s development. As India aims to hit the $5 trillion mark by 2025-26, the semiconductor industry is expected to contribute $1 trillion to the digital economy.
The Indian government unveiled a Rs. 76,000 crore package on Wednesday to develop a holistic ecosystem for semiconductor chip design, manufacturing, and packaging. The government has also stated that more than 1.35 lakh people will be employed as a result of this, as well as the creation of an independent intellectual property for India. The programme not only encourages chip production in the country, but it also addresses issues such as design and packaging. Many businesses have been plagued by the persistent semiconductor scarcity, including the automobile industry. Because of the semi-conductor scarcity, the Investment Information and Credit Rating Agency of India (ICRA) estimates that half a million fewer automobiles will be sold this year.
Because of the semi-conductor shortfall, which is hampering production, ICRA estimates that half a million fewer cars will be sold this year.
Ashwini Vaishnaw, the Union Minister for Electronics and Information Technology, told ET, “India would provide a 20-year strategy with an emphasis on talent generation and development. There is a very essential agreement in this agreement called C2S. (Chips To Startup). In conjunction with 60 institutes, 85,000 highly talented engineers will be generated over the next few years. Dollars may be found almost everywhere, but it’s the mind that counts.”
The ecosystem’s evolution must be considered holistically, and industry incentives will be crucial. Some of these incentives have been mapped out, and they include the following:
- Support by the government of upto 50 per cent of the project cost for semi-conductor and display fabs
- Support of up to 30 per cent of capital expenditure, for setting up compound semi-conductors/silicon photonics/sensor fabs and semi-conductor packaging facilities
- Design linked incentive scheme of upto 50 per cent of eligible expenditure
- Product deployment linked incentive of 6 per cent – 4 per cent on net sale for 5 years.
Many businesses have been plagued by the persistent semiconductor scarcity, including the automobile industry.
As a result, India intends to produce semi-conductors for the rest of the globe, with a holistic approach to the industry’s development. As India aims to hit the $5 trillion mark by 2025-26, the semiconductor industry is expected to contribute $1 trillion to the digital economy. Over the next 20 years, the output target has been set at $9.57 crore. In the next 20 years, the government anticipates exports to reach Rs. 5.15 lakh crore, making this initiative to make-in-India for the rest of the globe critical to the economy’s growth.
When it comes to the electronics industry, India has already achieved a level of $75 billion, and this ecosystem has improved people’s confidence. Vaishnaw threw in his two cents. “By 2025, we expect to have a market capitalization of $250 billion. And I’m being modest because the industry estimates $300 billion. Today, there is a healthy environment that can digest these chips, which gives people hope. There will be a lot of activity in the coming 4-6 months when it comes to chip manufacturer certifications.”