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India's efforts to boost its semiconductor industry UPSC NOTE

 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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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: India's efforts to boost its semiconductor industry UPSC NOTE
India's efforts to boost its semiconductor industry UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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