Lok Sabha Question No. 1431 (UNSTARRED), answered on 2021-07-28
Subject: Domestic Electronics Manufacturing Ecosystem
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Shrirang Appa Barne, Chandra Sekhar Sahu, Sudheer Gupta, Sanjay Sadashivrao Mandlik, Prataprao  Jadhav, Bidyut Baran Mahato

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO.1431

TO BE ANSWERED ON 28.07.2021

## DOMESTIC ELECTRONICS MANUFACTURING ECOSYSTEM

## 1431.SHRI  SHRIRANG  APPA BARNE:    SHRI  CHANDRA SEKHAR  SAHU: SHRI SUDHEER GUPTA:  SHRI  SANJAY SADASHIVRAO MANDLIK: SHRI PRATAPRAO JADHAV:  SHRI BIDYUT  BARAN MAHATO:

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

- (a) whether the absence of a robust domestic electronics ecosystem is adversely impacting the space programme targets of the country set by the Indian Space Research Organization(ISRO);
- (b) if so, the details thereof and the reaction of the Government thereto;
- (c) the details of the electronic imports by the country during each of the last three years and the current year;
- (d) whether the Government proposes to promote local semi-conductor fabrication units in the country;
- (e) if so, the details thereof along with the benefits provided by the Government for the said units, State/UT-wise; and
- (f) further steps taken /being taken by the Government to boost the chip manufacturing in the country?

## ANSWER

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

(a)  and  (b):  Indian  Space  Research  Organization  (ISRO)  uses  highly-reliable  space-grade electronics  components  specifically  manufactured  and  qualified  for  use  in  complex  space systems.  Some  of  the  electronic  components  that  ISRO  imports  are  amplifiers,  detectors, memory and RF devices, space-qualified solar  cells,  frequency  synthesizers,  space  qualified resistors / capacitors /inductors, etc. In the absence of domestic electronics ecosystem for this grade of  components, most of the requirements are being met through imports from reliable vendors who supply space qualified components.

(c): As per the Directorate General of Commercial Intelligence and Statistics (DGCIS), the total electronics imports by the country during each of the last three years and the current year are given below:

| Year                               | FY 2018-19   | FY 2019-20   | FY 2020-21   | FY 2021-22 (Till May)   |
|------------------------------------|--------------|--------------|--------------|-------------------------|
| Electronics Imports (In INR Crore) | 4,01,449.01  | 3,85,080.89  | 3,99,378.69  | 63,527.26               |

(d), (e) and (f): Semiconductor Laboratory (SCL), an autonomous body under the Department of Space, and Gallium Arsenide Enabling Technology Centre (GAETEC), Hyderabad, a unit of Society for Integrated Circuit Technology and Applied Research (SITAR) have facilities for Design,  Development,  Fabrication,  Assembly,  Packaging,  Testing  and  Quality  Assurance  of CMOS based semiconductor chips and GaAs monolithic microwave integrated circuits, RF sub systems,  respectively,  for  various  applications,  and  are  meeting  the  strategic  requirements. Semiconductor Technology and Applied Research Centre (STARC) Bengaluru is a pilot scale MEMS Foundry of DRDO operating with technological support from SSPL. STARC is mainly catering to the strategic MEMS sensors needs of DRDO.

ISRO  has  progressively  followed  a  systematic  policy  of  indigenizing  some  of  the  critical components like16/32-bit processors, data converters, memories, etc. through its fab facility at Semiconductor  Laboratory  (SCL),  Chandigarh  over  the  last  several  years.  Some  of  these components like processors and image detectors have already been inducted into ISRO's launch vehicles  and  satellites.  Other  requirements  such  as  connectors,  transformers,  relays,  etc.  are being realized and qualified at Indian industry to replace the respective imported components.

Presently, SCL, GAETEC and STARC facilities are being used for strategic purposes. There is no commercial semiconductor manufacturing facility in the country.

Following incentives are available to companies for setting up of Semiconductor Fabrication (FAB) facilities in India:

(i) A  financial  incentive  of  25%  on  capital  expenditure  is  available  for  setting  up  of semiconductor fabrication units under the Scheme for Promotion of manufacturing of Electronic Components and Semiconductors (SPECS).

(ii) Capital goods for setting up of Semiconductor FAB are exempted from Basic Customs Duty (BCD).

(iii) Investment linked deduction is available under Section 35AD of the Income- tax Act.

(iv) Deduction  of  expenditure  on  research  and  development  is  allowed  to  the  extent admissible under Section 35(2AB) of the Income-tax Act.

(v) New  domestic  companies  making  fresh  investment  in  manufacturing  and  starting operations before March 31, 2023 have an option to pay corporate income tax at reduced rate of 15%. Such companies will also not be liable to pay Minimum Alternate Tax (MAT).

The Government has  approved  the following projects in the  area of semiconductors  keeping  in  view  the  strategic  nature  of  this  sector  and  leading  to  chip manufacturing in the country:

(i) The project for 'Establishment of Gallium Nitride (GaN) Ecosystem Enabling Centre and

Incubator for High Power and High Frequency Electronics' is being implemented by Society for Innovation and Development (SID), under the auspices of Indian Institute of Science (IISc) at Centre for Nano Science and Engineering (CeNSE), Bengaluru at the total project cost of Rs. 298.66 crore. This facility will have a wafer line as well as a device line for RF and Power applications.

(ii) A project for setting up of Assembly, Testing, Marking and Packaging (ATMP) of NAND Flash memory has been approved under the Production Linked Incentive (PLI) Scheme for large scale  electronics  manufacturing.  This  shall  provide  semiconductor  packaging  facility  for memory products including Chip on Board Memories, micro SD Cards and Solid State Drives. (iii) Another project for discrete semiconductor devices, including transistors, diodes, thyristors, etc. and System in Package (SIP) has been approved under the Production Linked Incentive (PLI) Scheme for large scale electronics manufacturing.

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