New Delhi 

In order to position India (under Aatmanirbhar Bharat initiative) as the global hub for Electronic System Design and Manufacturing (ESDM), the Union Cabinet has approved the comprehensive program - with an outlay of Rs 760 billion (about $ 10 billion) - for the development of sustainable semiconductor and display ecosystem in the country. The new incentives are for every part of supply chain including electronic components, sub-assemblies, and finished goods. 

The program will usher in a new era in electronics manufacturing by providing a globally competitive incentive package to companies in semiconductors 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.

Semiconductors and displays are the foundation of modern electronics driving the next phase of digital transformation under Industry 4.0. Semiconductors and display manufacturing is very complex and technology-intensive sector involving huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology, which require significant and sustained investments. The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations.

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.

Following broad incentives have been approved for the development of semiconductors and display manufacturing ecosystem in India:

With the approval of the programme for development of semiconductors and display manufacturing ecosystem in India with an outlay of Rs 760 billion (about $ 10 billion), Government of India has announced incentives for every part of supply chain including electronic components, sub-assemblies, and finished goods. Incentive support to the tune of Rs 553.92 billion ($ 7.5 billion) have been approved under PLI for Larges Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. In addition, PLI incentives to the quantum of Rs 980 billion ($ 13 billion) are approved for allied sectors comprising of 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 trillion ($ 30 billion) to position India as global hub for electronics manufacturing with semiconductors as the foundational building block.

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 approved program will propel innovation and build domestic capacities to ensure the digital sovereignty of India. It will also create highly skilled employment opportunities to harness the demographic dividend of the country.

Development of semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain. The program will promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a $ 1 trillion digital economy and a $ 5 trillion GDP by 2025.