By the end of 2026, the government of India is looking for a growth of $55 billion and $110 billion by 2030

In a written reply to the lower house of the Indian parliament, Minister of State for Electronics and IT, Rajeev Chandrasekhar has stated that the government has received a total of four proposals setting-up chip manufacturing plants, and 13 for semiconductor assembly units. These applications are in addition to Micron’s investment of Rs 22,516 Cr chip assembly plant in Gujarat.

The minister said, “Four proposals have been received for setting up semiconductor fabs and additional 13 proposals have been received for setting up compound semiconductor fabs and ATMP ( assembly, testing, marking and packaging) facilities." The Semicon India Program was already approved by the union government, approving a total outlay of Rs 76,000 Crore for growing the display and semiconductor manufacturing industry in the nation. This incentive scheme will provide fiscal assistance to those firms who are planning to invest in India’s semiconductors, display manufacturing, and design ecosystem.

A couple of days back, the minister even added that the India semiconductor research center (ISRC) will spearhead in growing India’s potential in the semiconductor industry. The international semiconductor industry is dominated by a few firms operating in the US, Taiwan, and South Korea. This situation has forced India to become completely dependent on a few companies for this very important component, which is now serving as the backbone of cars to smartphones. 

Therefore, after carefully examining these situations, the central government after several rounds of heated discussions has started unleashing schemes and incentives to magnetize global semiconductor companies to Make-in-India. Towards the end of 2026, the government of India is looking for $55 billion in the semiconductor industry and also set a target of $110 billion by 2030.

Focus on Electronics Sector for empowering the citizens and inclusive growth through Digitalization and Technology

The Electronics Industries Association of India (ELCINA) applauded the significant steps announced by the Government for bolstering the Electronics System Design and Manufacturing (ESDM) sector, as unveiled in the interim Budget 2024-25 on Thursday, 1st February 2024.

One of the key concerns of electronics manufacturers was addressed through Extension of Key Customs Notifications upto 30th Sept’24 vide Notif No. 07/2024-Customs, dt 29th Jan’24. These are standalone Customs Notifications 25/98, 25/99, and 25/2002, covering semiconductors, raw materials, and capital equipment. Additionally, Notification No. 06/2024-Customs, dt 29th Jan’24 extends conditional Exemptions or Concessional BCD rates under Cus-50/2017, fostering a favorable environment for continued growth and innovation. This impacts large number of items of ESDM sector viz. mobile supply chain, solar, materials and more. 

ELCINA acknowledges this commitment to sustaining momentum in electronics manufacturing. Atul Lall, President ELCINA & Vice Chairman & CEO, Dixon Technologies stated “we appreciate the strong support from MeitY and Finance Ministry for favourably considering ELCINA’s recommendations. This will ensure continuity of the current policy and further catalyse growth of the industry. We are encouraged by these steps and ELCINA looks forward to a bold policy for strengthening the components eco-system in India and atleast doubling value addition over next 3-4 years”.

The Budget has made Substantial Allocations for Electronics Manufacturing Initiatives amounting to Rs 15,500 crore for key domains. This includes allocation of Rs 6,903 crore for various semiconductor projects further demonstrates the government's commitment. Appreciating the move, Amrit Manwani, Past President ELCINA and CMD, Sahasra Group, said “the allocation of incentives totaling Rs 4,203 crore for the establishment of assembly, test, and packaging plants is a strategic move and will encourage more investments in this important segment of the semiconductor value chain, bolstering domestic manufacturing capabilities”. 

This strategic investment includes robust support for the semiconductor mission and the Production-Linked Incentive (PLI) scheme for mobile and IT hardware. ELCINA anticipates these initiatives will catalyze innovation, create employment, and enhance the competitiveness of the Indian electronics industry globally.

Further, ELCINA notes with satisfaction the significant fillip  to the mobile Production-Linked Incentive (PLI) scheme, with a higher allocation of Rs 6,125 crore, up from Rs 4,489 crore in the previous year. This sector is growing rapidly and this step will continue and further accelerate growth of mobile manufacturing. However, ELCINA recommends, that equal attention must be given to mobile component manufacturing which remains a challenge.

It is noted that a smaller allocation of Rs 75 Crores has been made for IT Hardware PLI scheme and hopefully this will be increased in due course as manufacturing expands. The other longstanding electronics hardware manufacturing schemes have been allocated Rs 750 Crores as an interim amount. 

The proposed Rs 1 Lac Crore corpus the "Anusandhan" scheme, for Innovation and Research, is an initiative which will spawn new projects and technologies in deep tech areas, specially electronics, semiconductors and components research. This is a visionary step and with diligent implementation, can support the creation of a thriving and innovative ESDM sector.

The government's announcement of an outlay of ₹4795.24 crore for the Digital India program, ensuring universal access to high-speed internet and digital literacy initiatives, will continue to establish India’s leadership in this area which is a vital pillar for inclusive growth and digital transformation of the nation.

Rajoo Goel, Secretary General stated that “The substantial allotment of Rs 15,000 crore for various manufacturing schemes is poised to inject significant momentum into the industry. ELCINA recognizes the potential of the increased allocation for the Modified Programme for Development of Semiconductors and display manufacturing ecosystem. We now need to propel the electronic components and materials industry in the country which is critical for a resilient and sustainable ESDM sector”.

ELCINA commends these proactive measures by the government, recognizing their potential to usher in a new era of growth, innovation, and global competitiveness in the Indian ESDM sector. However, heightened expectations surround the full budget post general elections, with anticipation for additional measures aimed at catalyzing the growth of the ESDM sector.