Scheme for setting up Semiconductor Fab Units in India

Ministry of Electronics and Information Technology notified a semiconductor policy in order to boost the electronics manufacturing ecosystem in India.

Highlights

  • The semiconductor policy was cleared by Cabinet recently, in line with the National Policy on Electronics 2019 (NPE 2019).
  • This policy was launched by Government, with the aim of attracting big investments to set up Semiconductor Fabs in India.
  • Policy also seeks to make India a global hub for Electronics System Design and Manufacturing (ESDM).
  • According to government’s notification, establishment of semiconductor fabs in India will be supported by purchase preference in procurement of electronic products under Public Procurement (Preference to Make in India) Order 2017.

Government’s financial support

  • Government had unveiled a Rs 76,000 crore package in December 2021, to incentivise companies for establishing chip manufacturing and design facilities across India.
  • For the implementation of policy, government will provide financial support of around 50% of the project cost to set up two semiconductor and two display fabs in India.
  • The application window for this scheme will open on January 1, 2022, for 45 days.
  • Government will provide support on a pari-passu basis for six years, under the scheme.
  • The tenure of actual fiscal support outflow is extendable on the basis of approval of Minister of Electronics and Information Technology.
  • 5% of the scheme outlay will be used to meet the R&D (research and development), skill development and training requirements for developing the semiconductor ecosystem in India.

Government’s infrastructure support

  • Government will provide additional infrastructure support under the Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.
  • Government will also support for R&D, skill development and training, besides the support offered by state government.

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