Semiconductors PLI Scheme Worth Rs 76000 Crore a Turning Point for India

In what can be termed as a milestone for the Indian electronic industry, the Union Cabinet has sanctioned Rs 76,000 crore incentive plan for semiconductor fabricators and display manufacturers. The approval of this Product-Linked Incentive (PLI) scheme would encourage corporates to start manufacturing in India, making India a global electronics production hub.

According to Union Minister Anurag Thakur, the project intends to establish a complete semiconductor and display manufacturing ecosystem in India. Rs 76,000 crore, sanctioned under the scheme, will be spent on the project in six years. The country will have design, fabrication, packing and testing of the microchips, which will pave the path for the industry to broaden the horizon of research, manufacturing and export.

The announcement came at a time when the market is battling global supply chain issues in semiconductors.

PLI Scheme for Semiconductors is a Welcoming Move, Industry Experts

The industry experts see the newly approved PLI scheme as a welcoming move. According to NXP, one of the world’s largest semiconductor manufacturers and a key automotive component supplier, it is a big step to bring India on the world map of the semiconductors industry.

The existing challenges, such as the sudden surge in demand for semiconductors, will be addressed in the longer run. Robust financial support would augment the capabilities of the Indian manufacturers, making them globally competitive to attract investments.

Several international and national companies are interested in establishing semiconductor fabrication units in India, a government source confided to Reuters. Some of the speculated manufacturers include Israel’s Tower Semiconductor, Foxconn and a Singapore-based consortium, in addition to Vedanta Group.

Hemant Mallapur, Co-Founder & Exec VP of Engineering, Saankhya Labs, called the move a turning point for the electronics industry in India. He applauded the decision saying that this will help India become a major world player in electronics over the next two decades. “Good to see that both high-value aspects of design as well as manufacturing have been addressed as together, they will reinforce a multiplier effect. We are delighted to see that for the first time, there’s an incentive for the semiconductor “design” industry through the PLI scheme,” he said.

There are around 15-20 fabless design start-ups in India today, and the new project will provide them with the necessary support to bring the high-value intellectual property into India’s semiconductor value chain. Saankhya Labs anticipates the addition of many more Indian start-ups in the coming year.

Rs 1300 Crore Incentives to Encourage Digital Transactions

Besides the PLI scheme for semiconductors, the Union Cabinet has also approved incentives to encourage digital transactions through RuPay Debit Card and BHIM UPI of small amounts. Under the incentive plan, the government will reimburse the transaction charges levied on digital payments made by people to the merchant as part of the Merchant Discount Rate (MDR).

According to Union Minister Anurag Thakur, the project will incur an expense of around Rs 1,300 crores. In November, India witnessed 423 crore digital transactions valued at Rs 7.56 lakh crores.


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