India Bets Big on Semiconductor Ecosystem

The Indian government is set to disburse ₹7,100 crore in incentives during the current fiscal year to bolster its domestic semiconductor supply chain. This initiative targets the development of a comprehensive ecosystem, aiming to support one semiconductor fabrication unit, nine manufacturing facilities, and 30 design companies. The plan is expected to attract approximately ₹15,000 crore in fresh investments and generate around 4,700 jobs.

The Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem in India, overseen by the Ministry of Electronics and Information Technology (MeitY), will provide substantial fiscal support. The single semiconductor fab unit is slated to receive ₹2,000 crore, while the nine other manufacturing units will receive ₹5,000 crore. Additionally, the Design Linked Incentive (DLI) scheme will allocate ₹100 crore to support 30 semiconductor design companies.

This push is part of India's broader strategy launched in December 2021 with a ₹76,000 crore semiconductor mission. The objective is to foster indigenous capabilities across the entire semiconductor value chain, from fabrication and packaging to testing and design. Experts highlight this holistic approach as crucial for reducing import reliance and enhancing India's standing in the global semiconductor market, mitigating geopolitical risks associated with supply chain disruptions.