Context
The Prime Minister on 78th Independence day, outlined commitment towards becoming a global leader in semiconductor production and achieving the target of Viksit Bharat by 2047.
About
- There was a time when India used to import mobile phones but now India has created a production ecosystem within the country and emerged as a big production hub.
- Many global corporations are keen to put money into India, with the nation poised to end up a global chief in semiconductor production.
- There is a need for state governments to compete in attracting these investments, which requires rules that ensure good governance and law and order.
India’s Semiconductor Industry
- In 2022, the Indian semiconductor market was worth US$ 26.3 billion and is projected to increase at a CAGR of 26.3% to US$ 271.9 billion by 2032.
- Semiconductor gadgets consist of diodes, transistors and photovoltaic mobiles assembled or not assembled in modules or panels, mild-emitting diodes (LEDs) and established piezo-electric powered crystals.
Factors favouring India
- Skilled Workforce: India leads the arena with a reported number of Science, Technology, Engineering and Mathematics (STEM) graduates, presenting the plenty-wished professional staff required in semiconductor manufacturing, design, studies, and development.
- Cost Advantage: India gives a large price gain for semiconductor production because of the lower labour value, supply chain efficiency and emerging surroundings.
- Global Supply Chain Diversification: India has grown to be a desired vacation spot for back-end meeting and checking out operations amidst this industry relocation, with capacity for future front-end production.
- Policy support: The Indian government has right away seized the possibility following the global semiconductor supply chain glut after the pandemic and confirmed first rate cause through policy aid to give India as an opportunity to China within the global semi supply chain.
Government Initiatives
- India Semiconductor Mission: Its capabilities as a devoted division within the Digital India Corporation.
- Its predominant goal is to nurture a strong semiconductor and display atmosphere to position India as a prominent international player in electronics production and design.
- The government offers incentives for manufacturing setup in India:
- Under the Semiconductor Fab Scheme, fiscal assistance of 50% of the project cost on the same footing for all generation nodes.
- Under the Display Fab Scheme, economic assistance of 50% of the venture fee on an equal footing basis.
- Under the Compound Semiconductor Scheme, economic assistance of 50% of the capital expenditure on an identical footing foundation, consisting of aid for discrete semiconductor labs.
- In February 2024, the government accredited the status quo of three semiconductor plants, two in Gujarat and one in Assam.
Way Ahead
- India is poised to witness exponential increase in its semiconductor industry with the advent of well-concept projects in addition to calculated partnerships.
- Through the European Commission and Japan, the Indian government’s MoU indicates their dedication to take proactive steps closer to strengthening worldwide semiconductor ecosystems.
- With sustained efforts and a proactive stance, India is on direction to solidify its function as a leading semiconductor manufacturing hub, contributing majorly to technological advancement and monetary increase
Source: PIB