Domestic Production Of Electronic Goods Surpasses Rs 5.5 Lakh Crore In FY21

Domestic production of electronic goods has increased substantially from Rs 2,43,263 crore ($37 billion) in 2015-16 to Rs 5,54,461 crore ($74.7 billion) in 2020-21, growing at a Compound Annual Growth Rate (CAGR) of 17.9 per cent, the Parliament was told on Wednesday (20 July).

"Many policies of the Government including the flagship Production Linked Incentive (PLI) Schemes, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, Modified Electronics Manufacturing Cluster (EMC 2.0) Scheme are major steps towards making India “AtmaNirbhar” in electronics manufacturing," Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said in a written reply to a question in the Lok Sabha.

As semiconductors form a major part of all electronic products, as a result of growth in electronics manufacturing sector, semiconductor market in India has also witnessed proportionate growth over the last few years, he said, adding that as per the industry estimate, the semiconductor consumption in India was around Rs 1.1 lakh crore in year 2020 which is being met through imports due to absence of commercial semiconductor fabs in India.

"The government is very focused on its important objective of building the overall semiconductor ecosystem and ensure that, it in-turn catalyses India’s rapidly expanding electronics manufacturing and innovation ecosystem," the minister said.

Semicon India Programme to boost Indian presence in global electronics value chain

This vision of AtmaNirbharta in electronics and semiconductors was given further momentum by the Prime Minister Narendra Modi-led Union Cabinet approving the Semicon India programme with a total outlay of Rs 76,000 crore for the development of semiconductor and display manufacturing ecosystem in our country, the minister said.

The programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. This will serve to pave the way for India’s growing presence in the global electronics value chains, he added.

Four schemes under Semicon India Programme

The Central government has introduced four schemes under the Semicon India programme, that includes scheme for setting up of semiconductor fabs in India aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country.

Scheme for setting up of Display Fabs in India provides fiscal support to eligible applicants for setting up of Display Fabs which is aimed at attracting large investments for setting up TFT LCD/AMOLED based display fabrication facilities in the country. The scheme provides fiscal support of up to 50 per cent of project cost subject to a ceiling of INR 12,000 crore per Fab.

Scheme for setting up of compound semiconductors/ silicon photonics/ sensors fab and semiconductor assembly, testing, marking and packaging (ATMP)/ OSAT facilities in India. The scheme provides a fiscal support of 30 per cent of the capital expenditure to the eligible applicants for setting up of facilities for such products.

Further, the Design Linked Incentive (DLI) Scheme offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems and IP Cores and semiconductor linked design.

The scheme provides “Product Design Linked Incentive” of up to 50 per cent of the eligible expenditure subject to a ceiling of Rs 15 crore per application and “Deployment Linked Incentive” of 6 per cent to 4 per cent of net sales turnover over 5 years subject to a ceiling of Rs 30 Crore per application.

In addition to the above schemes, the government has also approved modernisation of Semi-Conductor Laboratory, Mohali as a brownfield Fab, the minister said.

Applications have been invited under various schemes for setting up of Semiconductor facilities. So far 23 applications have been received which are under evaluation, he added.

Challenges

Setting up of Semiconductor unit requires huge investments and necessitates suitable infrastructure like availability of uninterrupted power and clean water. Further, Semiconductors manufacturing is a very complex and technology-intensive sector with huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology which require significant and sustained investments, the minister said.

However, the government is committed to make all round efforts to develop semiconductors and display manufacturing ecosystem in India, he added.