Cabinet clears Rs 76,000 crore DLI scheme to make India semiconductor manufacturing hub

The Union Cabinet on Wednesday cleared a Design Linked Incentive (DLI) scheme, in a bid to make the country a design and manufacturing hub for semiconductor chips used in various electronic gadgets as well as automobiles. Totalling at $10 billion, the scheme will be implemented across six years. The government is also set to cover half the cost of chip design and development under the scheme, writes Krishnanand Tripathi for ETV Bharat.

New Delhi: The Union Cabinet on Wednesday cleared a Rs 76,000 crore Design Linked Incentive (DLI) scheme to make the country a design and manufacturing hub for the semiconductor chips that are used in computers, laptops, mobiles, automobiles and almost all other electronic gadgets, said the Information Technology Minister Ashwini Vaishnaw.

The $10 billion scheme, which will be implemented over a period of the next six years, aims to make the country a manufacturing hub by providing a globally competitive incentive package to companies engaged in design and manufacturing of semiconductors and display units.

The government said semiconductors and display manufacturing was a complex and technology-intensive sector involving huge capital investments, high risk, long gestation and payback periods which require significant and sustained investments.

“The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations,” he said.

I-T Minister Vaishnaw said the country already has a vast talent pool of top-quality semiconductor engineers in the country and Indian engineers account for roughly 20% of the global workforce of semiconductor engineers.

Vaishnaw said among all the semiconductor components, the most important was the semiconductor chip. These semiconductor chips are at the heart of all the modern electronic devices used today

“The country which is not capable of manufacturing the electronic wafer will remain laggard,” noted the minister.

Vaishnaw said under the scheme the government will also help train 85,000 top quality semiconductor engineers.

In order to encourage innovation in semiconductor designing and manufacturing, the government would also launch a Chips-to-Startups (CtoS) scheme and it will help in the establishment of 15-20 startups in the next two years.

It will bear half of the cost of chip design and development under the scheme which would cover the cost of procurement of software used in chip designing, design and fabrication cost and wastage.

The government will also promote small and medium enterprises, particularly the SMEs will be encouraged to design and manufacture compound semiconductors, said the minister.