Lok Sabha Question No. 47 (UNSTARRED), answered on 2022-02-02
Subject: Development of Semi Conductor
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Raja Amareshwara Naik, Sangeeta Kumari Singh Deo, Bhola Singh, Rajveer (Raju Bhaiya) Singh, Sukanta Majumdar, Jayanta Kumar Roy, Vinod Kumar Sonkar

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 47

TO BE ANSWERED ON: 02.02.2022

## DEVELOPMENT  OF SEMI CONDUCTOR

## 47. SHRI RAJA AMARESHWARA NAIK:

SHRIMATI SANGEETA KUMARI SINGH DEO:

SHRI BHOLA SINGH:

SHRI RAJVEER SINGH (RAJU BHAIYA):

DR. SUKANTA MAJUMDAR:

DR. JAYANTA KUMAR ROY:

SHRI VINOD KUMAR SONKAR:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:

- (a)  whether  the  Government  proposes  the  comprehensive  program  for  the  development  of sustainable semiconductor and display ecosystem in the country;
- (b) if so, the details thereof;
- (c)  whether  the government  has  proposes  to  set  up  a  specialized  and  independent  'India Semiconductor Mission ( ISM)' in the country;
- (d) if so, the details thereof;
- (e) whether the abovesaid program will usher a new era in electronics manufacturing by providing a globally  competitive  incentive  package  to  companies  engaged  in  semiconductors  and  display manufacturing as well as design;
- (f) if so, the details thereof; and
- (g)  the  details  of  the  other  steps  being  taken  by  the  Government  in  furtherance  of  the  vision  of Aatmanirbhar  Bharat  and  positioning  India  as  the  global  hub  for  Electronic  System  Design  and Manufacturing?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAJEEV CHANDRASEKHAR)

(a)  and  (b):  Yes,  Sir.  The  government  is  very  focussed on its  important  objective of building the overall  semiconductor  ecosystem  and  ensure  that,  it  in-turn  catalyses  India's  rapidly  expanding electronics manufacturing and innovation ecosystem. This vision of AtmaNirbharta in electronics & semiconductors was given further momentum by the Union Cabinet chaired by the Hon'ble Prime Minister approving the Semicon India programme with a total outlay of INR 76,000 crore for the development of semiconductor and display manufacturing ecosystem in our country. The programme  aims  to  provide  financial  support  to  companies  investing  in  semiconductors,  display manufacturing and design ecosystem. This will serve to pave the way for India's growing presence in the global electronics value chains.

Following four schemes have been introduced under the aforesaid programme:

- i. Scheme  for  setting  up  of  Semiconductor  Fabs  in  India provides  fiscal  support  to eligible  applicants  for  setting  up  of  Semiconductor  Fabs  which  is  aimed  at  attracting large investments for setting up semiconductor wafer fabrication facilities in the country. Following fiscal support has been approved under the scheme:
2.  28nm or Lower - Up to 50% of the Project Cost
3.  Above 28 nm to 45nm - Up to 40% of the Project Cost
4.  Above 45 nm to 65nm - Up to 30% of the Project Cost
- ii. Scheme  for  setting  up  of  Display  Fabs  in  India provides  fiscal  support  to  eligible applicants for setting up of Display Fabs which is aimed at attracting large investments for setting up TFT LCD / AMOLED based display fabrication facilities in the country. The Scheme provides fiscal support of up to 50% of Project Cost subject to a ceiling of INR 12,000 crore per Fab.
- iii. Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab  and  Semiconductor  Assembly,  Testing,  Marking  and  Packaging  (ATMP)  / OSAT facilities in India: The Scheme provides a fiscal support of 30% of the Capital Expenditure  to  the  eligible  applicants  for  setting  up  of  Compound  Semiconductors  / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab and Semiconductor ATMP / OSAT facilities in India.
- iv. Design Linked Incentive (DLI) Scheme offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems &  IP Cores and semiconductor linked  design. The scheme provides 'Product Design Linked Incentive' of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application and 'Deployment Linked Incentive' of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application.

In addition to the above schemes, Government has also approved modernisation of Semi-Conductor Laboratory, Mohali as a brownfield Fab.

- (c) and (d): Yes, Sir. Cabinet approval is also granted for setting up of India Semiconductor Mission (ISM) as an Independent Business Division within Digital India Corporation having administrative and  financial  autonomy  to  drive  India's  strategies  for  developing  semiconductors  and  display manufacturing ecosystem. Envisioned to be led by global experts in the Semiconductor and Display industry, ISM will serve as the nodal agency for efficient, coherent and smooth implementation of the schemes.
- (e) and  (f):  Yes  Sir.  The  Semicon  India  program  is  expected  to  usher  a  new  era  in  electronics manufacturing  by  providing  a  globally  competitive  incentive  package  to  companies  engaged  in semiconductors and display manufacturing. Semiconductors are key to the 'must-win' technologies of the future, including artificial intelligence and 5G, which will be essential to achieving the goal of a  'dynamic,  inclusive  and  innovative  economy'  identified  as  a  critical  national  advantage.  In addition,  the  advanced  autonomous  systems,  cyber  security,  space  and  hypersonics,  and  directed energy are also dependent on semiconductor technologies.

The  Semicon  India  programme  provides  fiscal  support  for  all  the  major  stages  of  semiconductor production: design, semiconductor fabs, display fabs, specialisedfabs for compound semiconductors, silicon photonics and sensors, Assembly, Testing, Marking and Packaging (ATMP) units etc.

(g): Steps taken by the Government for making India a global hub for Electronics System Design & Manufacturing (ESDM):

1. National Policy on Electronics 2019: The National Policy on Electronics 2019 (NPE 2019) has been notified on 25.02.2019. The vision of NPE 2019 is to position India as a global hub for  Electronics  System  Design  and  Manufacturing  (ESDM)  by  encouraging  and  driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.
2. 100% FDI: As per extant Foreign Direct Investment (FDI) policy, FDI up-to 100% under the automatic route is permitted for electronics manufacturing (except from countries sharing land  border  with  India),  subject  to  applicable  laws  /  regulations;  security  and  other conditions.
3. Electronics Manufacturing Clusters (EMC) Scheme: Electronics Manufacturing Clusters Scheme was notified on 22nd October, 2012 to provide support for creation of world-class infrastructure along with common facilities and amenities for attracting investment. Under the Scheme, 19 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3,464 acres with total project cost of INR 3,762 crore including Government Grant-in-Aid of INR 1,538 crore have been approved.
4. Electronics Development Fund (EDF): Electronics Development Fund (EDF) has been set up as a 'Fund of Funds' to participate in professionally managed 'Daughter Funds' which in turn will provide risk capital to startups and companies developing new technologies in the area of electronics and Information Technology (IT). This fund is expected to foster R&D and innovation in these technology sectors. INR 409 crore has been committed through EDF to 9 Daughter Funds with a targeted corpus of INR 2,626 crore.
5. Phased Manufacturing Programme (PMP) has  been  notified  to  promote  domestic  value addition in mobile phones and their sub-assemblies / parts manufacturing. As a result, India has  rapidly  started  attracting  investments  into  this  sector  and  significant  manufacturing capacities have been set up in the country. The manufacturing of mobile phones has been steadily  moving  from  Semi Knocked Down (SKD) to Completely Knocked Down (CKD) level, thereby progressively increasing the domestic value addition.
6. Tariff  Structure  has  been  rationalized to  promote  domestic  manufacturing  of  electronic goods, including, inter-alia, Cellular mobile phones, Televisions, Electronic components, Set Top Boxes for TV, LED products and Medical electronics equipment.
7. Exemption  from  Basic  Customs  Duty  on  capital  goods: Notified  capital  goods  for manufacture of specified electronic goods are permitted for import at 'NIL' Basic Customs Duty.
8. Simplified import of used plant and machinery: The import of used plant and machinery having a residual life of at least 5 years for use by the electronics manufacturing industry has been simplified through the amendment of Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, vide Ministry of Environment, Forest and Climate Change Notification dated 11.06.2018.
9. Relaxing the ageing restriction: The Department of Revenue vide Notification No.60/2018-Customs  dated  11.09.2018  has  amended  the  Notification  No.158/95-Customs dated  14.11.1995,  relaxing  the  ageing  restriction  from  3  years  to  7  years  for  specified electronic goods manufactured in India and re-imported into India for repairs or reconditioning.
10. Public Procurement (Preference to Make in India) Order 2017: To encourage 'Make in India' and to promote manufacturing and production of goods and services in India with a view to enhancing income and employment, the Government has issued Public Procurement (Preference to Make in India) Order 2017 vide the Department for Promotion of Industry and Internal Trade (DPIIT) Order dated 15.06.2017 and subsequent revisions vide Orders dated 28.05.2018, 29.05.2019, 04.06.2020 and 16.09.2020. In furtherance of the aforesaid Order, MeitY has notified mechanism for calculating local content for 13 Electronic Products viz., (i) Desktop PCs, (ii) Thin Clients, (iii) Computer Monitors, (iv) Laptop PCs, (v) Tablet PCs, (vi) Dot Matrix Printers, (vii) Contact and Contactless Smart Cards, (viii) LED Products, (ix) Biometric Access Control / Authentication Devices, (x) Biometric Finger Print Sensors, (xi) Biometric Iris Sensors, (xii) Servers, and (xiii) Cellular Mobile Phones, for procurement to be made from local suppliers.
11. Compulsory Registration Order (CRO): MeitY has notified 'Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2012' for mandatory compliance to ensure safety of Indian citizens by curbing import of substandard and unsafe electronic goods into India. 63 Product Categories have been notified under the CRO and the order is applicable on 63 product categories.
12. Establishment of Gallium Nitride (GaN) Ecosystem Enabling Centre and Incubator: The  project  for  'Establishment  of  Gallium  Nitride  (GaN)  Ecosystem  Enabling Centre and Incubator for High Power and High Frequency Electronics' has been approved. The project is being implemented by Society for Innovation and Development (SID), Centre for Nano Science and Engineering (CeNSE), IISc Bengaluru.

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