Govt notifies scheme for setting up semiconductor fab units in India

The Ministry of Electronics and Information Technology has notified a semiconductor policy in an attempt to boost the electronics manufacturing ecosystem in India.  

The scheme was cleared by the Cabinet last week and is in line with the National Policy on Electronics 2019 (NPE 2019).

With this, the government is aiming to attract big investments for setting up Semiconductor Fabs in the country and making India a global hub for Electronics System Design and Manufacturing (ESDM).  
As per the gazette notification, the government will provide the financial support of up to 50% of the project cost for two semiconductor and two display fabs in the country. The application window for the scheme opens on January 1, 2022, for 45 days.  

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The government shall provide support under the scheme on a pari-passu basis for a period of six years. "Support shall be provided for a period of six years.

The tenure of the actual fiscal support outflow may be extended based on the approval of the Minister of Electronics and Information Technology," as per the official release.  

The government will also provide additional infrastructure support through Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, support for R&D, skill development and training along with support offered by the state government if any, and demand aggregation.  

The semiconductor fabs established in India will be supported through purchase preference in procurement of electronic products by the government under the Public Procurement (Preference to Make in India) Order 2017, according to the notification.

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Furthermore, up to 2.5% of the scheme outlay will be earmarked for meeting the R&D (research and development), skill development as well as training requirements for the development of the semiconductor ecosystem in the country. 

The government had unveiled a Rs 76,000 crore ($10 billion) package last week in order to incentivise companies to establish chip manufacturing and design facilities in India.