Current Status and Challenges:
India has a large electronics export industry valued at $110 billion.
However, the value addition in these exports is only around 18-20%, primarily due to assembly and labor.
This reliance on assembly work creates a risk, as other countries with cheaper labor could easily take over this role.
Government Initiatives:
The Ministry of Electronics and Information Technology (MeitY) is committed to deepening India's value chain in the semiconductor sector.
The government has launched a ₹76,000 crore incentive program for developing a sustainable domestic semiconductor and display ecosystem.
This program offers a 50% subsidy from the central government, with some states providing additional incentives, bringing the total subsidy up to 75%.
The government may seek additional funding from the Union Finance Ministry in the future.
Focus on Manufacturing:
To become a major player in semiconductors, India needs to move beyond assembly and focus on manufacturing components.
This requires precision manufacturing at the atomic level, which is an area where India can learn from leading manufacturers like Taiwan, Korea, and Japan.
Building the Ecosystem:
The government's strategy goes beyond just attracting large fabrication plants (fabs).
It aims to support the entire semiconductor ecosystem, including:
Suppliers of equipment (nearly 300 vendors)
Manufacturers of necessary chemicals
By supporting the entire ecosystem, India can build a robust and sustainable semiconductor industry.
India's Strength in Design:
While India faces challenges in manufacturing, it has a strong presence in semiconductor design.
An estimated 20-25% of the global design workforce is based in India.
Overall Goal:
The Indian government's plan is to leverage India's design strengths and address its manufacturing limitations to become a major player in the global semiconductor industry.
This will require collaboration between the central government, MeitY, state governments, and private companies.
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