From the beginning of the COVID-19 era, the shortage of semiconductor chips has nabbed the automotive industry of several countries, including India. As a result, the auto manufacturers slow down production and the deliveries timeline of vehicles are getting affected. Now to tackle this problem and boost semiconductor manufacturing in the country, the union government has announced incentives scheme of Rs 2.3 lakh crore (USD 30 billion) for the development and production of semiconductors and other electronic components in India.
The new policy strives to mold a semiconductor manufacturing ecosystem in the country over the next 5-6 years. As per the policy, Rs 76,000 crore will be used to incentivize the production of semiconductors and displays alone, whereas Rs 55,392 crores have been set aside for Production Linked Incentive (PLI) for Large Scale Electronics Manufacturing, IT Hardware, SPECS Scheme, and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. PLIs worth Rs 98,000 crore will be used for allied sectors comprising ACC battery, auto components, telecom & networking products, solar PV modules, and white goods. This scheme will not only create a lot of jobs opportunities in the country but will also bring down the final cost of electronic devices. It will also boost the electric vehicles (EV) segment as well.
As per the scheme plans, 50 percent cover of the project will be given to the eligible companies to set up semiconductor fabrication in India. For now, at least two new fabrication facilities each for semiconductors and display are to be set up in the country. In addition, ten units for designing and manufacturing components are in the plans.
