Govt plans to provide incentives worth Rs.76,000 crore to semiconductor firms
In a bid to make India a hub for electronics, the government is planning to provide incentives worth Rs.76,000 crore towards setting up over 20 semiconductors design, components manufacturing, and display fabrication (fab) units over the next six years.
Semiconductors are used for making a wide range of products ranging from automobiles to handsets.
The scheme is likely to be presented at the Cabinet next week. Post its approval, the Ministry of Electronics & IT (MeitY) would work out the granular details and invite applications.
The development comes on the sidelines of a projected global chip shortage to extend until early 2023. Its demand may remain above the long-term expectation in 2022. The proposed plan includes government providing up to 50 percent of CAPEX to entities selected for manufacturing semiconductor fab along with providing design-linked incentives. The package is likely to be over and above the production-linked incentives for the manufacturing of electronic components and semiconductors. The incentive plan will help India attract investments worth Rs.1.7 lakh crore in the next six years.
“Through various PLI (production linked incentive) schemes, the Centre has tried to broaden the scope of manufacturing and export from India while the semiconductor policy will help deepen India’s manufacturing base,” a senior government official said.
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