Indian semiconductor policy: everything that’s happened so far

While India’s demand for electronics and consumer technology grows, it remains to be a complete importer of semiconductors till date. Since 2007, the government has attempted to make moves that attracted semiconductor foundries to India and set up billion-dollar plants in the country. Now, as 2021 comes to an end, reports suggest that India is yet again looking to incentivise companies to make semiconductor chips in India. On this note, here’s looking at India’s semiconductor policy till date.

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December 15, 2021: Government announces PLI for semiconductors

The Indian government announced a Rs. 76000 crore policy meant to woo semiconductor manufacturers to the country. Read more about the policy here.

2021: Upcoming PLI?

Recent reports suggest that the government is seeking to offer production linked incentive (PLI) schemes worth up to Rs 76,000 crore over six years, to set up over 20 semiconductor design, component manufacturing and display fabrication plants in the country. The PLI has been sent for cabinet approval, and is expected to be announced shortly.

2020: Expression of interest, setup of SPECS

In December 2020, MeitY issued an expression of interest from companies to set up semiconductor plants in India, extending the deadline of applications in the country to April 2021.

The MeitY also set up the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), in a bid to boost this sector with a 25% incentive on capital expenditure.

2015: Reconstitution of empowered committee

In 2015, the present Indian government announced, under the ministry of electronics and information technology (MeitY), the reconstitution of an empowered committee to reinvigorate India’s push for manufacturing of semiconductor fabrication plants in India.

Also read: KLA Corp expands India presence for semiconductor-based R&D

2013: Renewed efforts for low-power chip manufacturing

After India’s plans to bring semiconductor manufacturing to the country failed due to reportedly inadequate infrastructure, reports suggested that under the National Electronics Policy of 2011, the erstwhile government subsequently attempted to frame a policy to attract low power chip manufacturing to India in 2013. The move came as previous efforts reportedly failed due to a lack of adequate resources and market incentives on offer in the country.

2011: Restructured semiconductor policy

The erstwhile Indian government incrementally reiterated the existing semiconductor policy in April 2011, citing a rising Indian economy and increasing consumer demand to expect bigger investments to come in. The rehashed policy of 2011 came despite industry reports claiming that a 20-25% capital expenditure incentive on semiconductor manufacturing was not enough -- when neighbouring players such as China were already offering up to 50% incentives.

2007: First semiconductor policy

Back in 2007, the erstwhile Indian government had rolled out the country’s first semiconductor policy in a bid to attract major semiconductor manufacturers. The policy had sought to offer a 20% incentive on capital expenditure through 10 years, to set up semiconductor fabrication units within Special Economic Zones (SEZs). The policy mandated a minimum investment of Rs 2,500 crore to avail the incentive.

Manufacturing of other devices, such as storage media and display panels demanded Rs 1,000 crore investments behind plants. The policy came after reports stated that chipmaker AMD, one of the world’s leading players in this sector, was reportedly considering a $3 billion chipset fabrication plant in a joint venture in India back in 2005. Intel, too, was considering India as a destination at one point.