Lok Sabha Question No. 3218 (UNSTARRED), answered on 2025-03-19
Subject: Electronics Manufacturing Expansion
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Shri Benny Behanan

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION. NO. 3218

TO BE ANSWERED ON: 19.03.2025

## ELECTRONICS MANUFACTURING EXPANSION

## 3218. SHRI BENNY BEHANAN:

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

- (a) whether the Government is aware of recent initiatives to expand iPhone manufacturing in the country;
- (b) the extent of current and projected manufacturing operations within the country; and
- (c) the measures being taken by the Government to support foreign investments and to develop a robust local supply chain ecosystem for electronics manufacturing?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI JITIN PRASADA)

- (a):    Government of India has taken several initiatives to expand electronics manufacturing in the country including mobile phones. To boost domestic manufacturing and attract investment in mobile  phones  value  chain  including  electronic  components  and  semiconductor  packaging, Production  Linked  Incentive  Scheme  (PLI)  for  Large  Scale  Electronics  Manufacturing  was notified  on  01.04.2020.  Since  the  inception  of  PLI  Scheme  i.e.  2020-21,  the  mobile  phone production has grown at impressive compound annual growth rate of more than 24% from INR 2,20,000  crore  in  FY2020-21  to  INR  4,22,000  crore  in  FY2023-24,  and  mobile  phone  export have grown at CAGR of 78% from INR 22,868 crore in FY2020-21 to INR 1,29,074 crore in FY2023-24 (Source: Industry Estimates) .
- (b):   Industry estimates indicate that the production of electronic goods in the country reached INR 9.52 lakh crore in FY2023-24. For FY2024-25, electronics production is expected to rise to INR 11.7 lakh crore, with mobile phone production alone projected to reach INR 5.25 lakh crore. Furthermore, it is  expected  that  India's  electronics  manufacturing  sector  could  reach  USD  500 billion by 2030.
- (c):    The  measures  taken  by  Government  to  attract  and  incentivize  large  investments  in  the electronics  value  chain  and  to  develop  a  robust  local  supply  chain  ecosystem  for  electronics manufacturing are placed at Annexure -1.

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Measures  taken  by  Government  to  attract  and  incentivize  large  investments  in  the electronics value chain and to develop a robust local supply chain ecosystem for electronics manufacturing

1. Modified  Program  for  Development  of  Semiconductors  and  Display  Manufacturing Ecosystem :  To  widen  and  deepen  electronics  manufacturing,  the  Union  Cabinet  on 15.12.2021, approved a comprehensive program with an outlay of INR 76,000 crore for the development of Semiconductors and Display manufacturing ecosystem. With the approval of Cabinet, this  Programme  has  been recently modified on 21.09.2022. The modified programme offers Fiscal Support of 50% of Project Cost uniformly for semiconductor fabs across the technology nodes as well as for compound semiconductors, packaging and other semiconductor facilities.

Following fiscal incentives are now available to eligible applicants:

-  Modified Scheme for setting up of Semiconductor Fabs : It provides fiscal support for setting up semiconductor wafer fabrication facilities in the country. Fiscal support of 50% of the Project Cost is available for setting up of silicon-based semiconductor fabs across all technology nodes.
-  Modified Scheme for setting up of Display Fabs : It provides fiscal support for setting up TFT LCD / AMOLED based display fabrication facilities. It provides fiscal support of 50% of Project Cost.
-  Modified Scheme for setting up of Compound Semiconductors / Silicon Photonics /Sensors  Fab/  Discrete  Semiconductor  Fabs  and  Semiconductor  ATMP  /  OSAT facilities in India :  It  provides a fiscal support of 50% of the Capital Expenditure to the eligible applicants for setting up of Compound Semiconductors / Silicon Photonics (SiPh) /  Sensors  (including  MEMS)  Fab/  Discrete  Semiconductor  Fabs  and  Semiconductor ATMP / OSAT facilities in India.
-  Modernization  of  Semi-Conductor  Laboratory: Government  has  also  approved modernization  of  Semi-Conductor  Laboratory,  Mohali  to  enhance  efficiency  and  cycle time
-  Design  Linked  Incentive  Scheme :  It  offers  financial  incentives,  design  infrastructure support across various stages of development and deployment of semiconductor design for  ICs,  Chipsets,  SoCs,  Systems  &  IP  Cores  and  semiconductor  linked  design.  The scheme  provides  both  'Product  Design  Linked  Incentive'  and  'Deployment  Linked Incentive'.

Government has also approved modernisation of Semi-Conductor Laboratory, Mohali. Besides, MoU  for  cooperation  in  development  of  semiconductor  ecosystem  have  been  signed  with Singapore, USA, European Union and Japan.

Applied Materials has set up a collaborative engineering centre in Bengaluru with an investment of  400  million  dollars  over  4  years.  This  engineering  centre  is  focused  on  development  and commercialisation  of  technologies  for  semiconductor  manufacturing  equipment.  AMD  has established  its  largest  global  design  center,  AMD  Technostar,  in  Bengaluru.  This  centre  is focused  on  the  design  and  development  of  semiconductor  technology  including  3D  stacking, artificial intelligence, and machine learning.

India  is  well  on  its  path  to  create  a  robust  semiconductor  ecosystem  in  the  country.  5 semiconductor  units  with  cumulative  investment  of  Rs  1.52  Lakh  Crore  have  been  approved under the Semicon India Programme. Construction on these units is going on at a rapid pace.

15  semiconductor  design  companies  are  being  supported  under  the  Design  Linked  Incentive Scheme. Additionally, 41 semiconductor design companies have been approved for access of the EDA  tools  made  available  by  National  EDA  Tool  Grid  setup  at  ChipIN  Centre  at  C-DAC Bengaluru.

The  approved  semiconductor  manufacturing  facilities  under  Semicon  India  Programme  are expected to  generate  direct  employment  of  about  25,000  advanced  technology  jobs  and  about 60,000 indirect jobs.

2. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing was notified on April 01, 2020 to provide an incentive of 3% to 6% to eligible companies on incremental sales (over base year) involved in mobile phone manufacturing and manufacturing  of  specified  electronic  components,  including  Assembly,  Testing,  Marking and Packaging (ATMP) units. Till Feb'2025, the scheme has led to cumulative investment of INR 10,905 Cr, leading to cumulative production of INR 7,15,823 Cr, cumulative exports of INR 3,90,387 Cr and has generated additional employment of 1,39,670 (Direct jobs).
3. The Production Linked Incentive (PLI) Scheme for IT Hardware , notified on March 3, 2021, offers 4% to 2%/1% incentives on net incremental sales of Laptops, Tablets, All-inOne PCs and Servers for four years. The PLI Scheme 2.0 for IT Hardware, notified on May 29, 2023, provides an average 5% incentive on net incremental sales of Laptops, Tablets, Allin-One PCs, Servers and Ultra Small Form Factor devices for six years. Till Feb'2025, both PLI Scheme for IT Hardware and PLI Scheme 2.0 for IT Hardware have combinedly led to a total cumulative production of Rs. 10,365.05 crore, total cumulative investment of Rs. 522.15 crore and total cumulative employment of 5132 (direct jobs).
4. Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) was notified on April 01, 2020 to provide financial incentive of 25%  on  capital  expenditure  for  the  identified  list  of  electronic  goods  that  comprise downstream value chain of electronic products, i.e., electronic components, semiconductor / display  fabrication  units,  ATMP  units,  specialized  sub-assemblies  and  capital  goods  for manufacture  of  aforesaid  goods.    Till  Feb'2025,  the  scheme  has  attracted  cumulative investment of INR 10,723 Cr, leading to cumulative production of INR 27,429 Cr, and has generated employment of 38,206 persons.
5. Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme was notified on April 01,  2020  to  provide  support  for  creation  of  world  class  infrastructure  along  with  common facilities and amenities, including Ready Built Factory (RBF) sheds / Plug and Play facilities for attracting major global electronics manufacturers along with their supply chain to set up units in the country. The Scheme provides financial assistance for setting up of both EMC projects and Common Facility Centres (CFCs) across the country.
6. Modified Special Incentive Package Scheme (M-SIPS) : The Scheme was notified on 27 th July, 2012 to provide financial incentives to offset disability and attract investments in the electronics manufacturing sector. It was amended in August, 2015 to extend the period of the scheme, enhance scope  of the Scheme by including 15 more product verticals,  and attract more  investment.  The  scheme  was  further  amended  in  January,  2017  to  expedite  the investments. The scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs. The incentives are available for 44 categories  /  verticals  of  electronic  products  and  components  covering  entire  electronics manufacturing value chain. The Scheme was open to receive applications till 31.12.2018 and
6. is  in  the  implementation  mode.  Till  Feb'2025,  the  scheme  has  attracted  cumulative investment of INR 48,437 Cr, leading to cumulative production of INR 13,98,184 Cr, and has generated employment of 1,52,039 persons.
7. 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.
8. 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.
9. Rationalisation  of  Tariff  Structure: 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.
10. 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.

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