The Union Cabinet approved Rs 76,000 crore scheme for developing semiconductors and exhibit manufacturing ecosystem in India.
The decision has come amid a global shortage of chips impacting the manufacturing sector. The Indian car industry has been among the most hit areas by the chip shortage and has been wrestling with the difficulty of meeting the demand.
The mega semi-conductor project is expected to deepen India’s integration with the global value chain and have a multiplier effect across various sectors. As per the plan, a minimum of 20 chip-manufacturing units would be set up in the next 2 years.
Accordingly, a chips to start-ups (C2S) plan has been approved. A design-linked incentive (DLI) has been approved by the government under which 50% of the design-related expenditure would be borne by the Government of India. The Programme for Development of Semiconductors and Display Manufacturing Ecosystem is expected to significantly contribute to achieving US$ 1 trillion digital economy and a US$ 5 trillion GDP by 2025.
Ashwini Vaishnaw said that in the last seven years the electronics manufacturing industry in the country has reached US$ 75 billion. “…and the rate at which we are moving we would reach the figure of US$ 300 billion in the next six years,” he said.
In a move to further boost the fintech sector, the Cabinet also cleared an incentive scheme for the promotion of RuPay Debit Cards and low-value BHIM-UPI transactions.
Working on the project to make India a global chip manufacturing hub, Minister for Communications, Electronics & Information Technology and Railways Ashwini Vaishnaw said that the government has also aimed on creating a talent pool of highly-qualified engineers over the coming years.