Cabinet approves 50% incentive to manufacture semiconductors

BL New Delhi Bureau | Updated on: Sep 21, 2022

| Photo Credit: ANN WANG

‘The modifications will strengthen the semi-conductor scheme and raise capacities within the country’

The Cabinet, on Wednesday, approved modifications in the scheme for semiconductors and display manufacturing ecosystem, with a uniform fiscal support of 50 per cent of the project cost for all technology nodes and setting up of display fabs.

Fiscal support of 50 per cent of capital expenditure on pari-passu basis under scheme for setting up of compound semiconductors, silicon photonics, sensors fab and semiconductor ATMP facilities in India, said a government statement.

According to Anurag Thakur, I&B Minister, the modifications will strengthen the semi-conductor scheme and raise capacities within the country, encourage investments and create employment opportunities.

The Minister said due to supply-chain disruption, many countries have announced financial incentives to companies for semiconductor manufacturing. Therefore, the government has tweaked the existing scheme to attract companies.

“India’s consumption remains high and almost the entire requirement is imported. Earlier the PLI benefits were between 30-50 per cent of project cost depending on categories. Now it is a uniform fiscal support of 50 per cent across categories of the scheme,” said Thakur.

The programme has attracted many global semiconductor players for setting up fabs in India. And the modified program will expedite investments in semiconductor and display manufacturing in the country.

On the basis of discussion with potential investors, it is expected that work on setting up of the first semiconductor facility will commence soon, the release added.

According to Anurag Awasthi, Vice-President, (Public Policy, Government and Corporate Relations), India Electronics and Semiconductor Association, the ensuing modification possesses an astute clarity in terms of deliverables, timelines and percentage of capital outlay, when compared to many other policies worldwide.

“The policy is clear on support for R&D and skill development. The modification will energise various sectors to include electronics, automotive, defence and aerospace. This will further accrue large investments by companies to set up chip design and manufacturing facilities in India,” he said.

“It is a landmark policy decision and will go a long way in boosting home grown talent, design and also manufacturing in semiconductors and EDSM space in India,” Awasthi added.

Published on September 21, 2022
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