Lok Sabha Question No. 1464 (UNSTARRED), answered on 2024-07-31
Subject: Incentive Programme
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Shri  Selvaganapathi T.M.

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO.1464

TO BE ANSWERED ON: 31.07.2024

## INCENTIVE PROGRAMME

## 1464.    SHRI SELVAGANAPATHI T.M.:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGYbe pleased to state:

- (a) whether it is a fact that  the Government has already cleared Rs.70,000 crore out of Rs.76,000  crore on incentive programmes  for  the  development  of  sustainable semiconductor and display ecosystem;
- (b) whether it is a fact that in addition to the 50% incentive from the Centre, States will also

provide  a  top-up  incentive  and  the  State  of  Tamil  Nadu  has  already  provided  a  top-up incentive for the same;

- (c) whether it is a fact that in the process of setting up of a semiconductor unit in India, 75% of its cost is subsidised and if so, the details thereof;
- (d) whether it is also true that to sustain semiconductor industry in the country, we need to deepen the value chain or else it will move to another country; and
- (e) if so, the steps taken in this regard?

## ANSWER

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

- (a) to (e):Steps taken by Government to encourage domestic manufacturing of semiconductors in the country are as follows:
- (i) Government has approved Semicon India programme with a total outlay of INR 76,000  crore  for  the  development  of  semiconductor  and  display  manufacturing ecosystem  in  the  country.  The  programme  aims  to  provide  financial  support  to companies investing in semiconductors, display manufacturing and design ecosystem.

Following four schemes have been introduced under the aforesaid programme:

- a) ' Modified Scheme for setting up of Semiconductor Fabs in India ' extends a fiscal  support  of  50%  of  the  project  cost  on pari-passu basis  for  setting  up  of Silicon CMOS based Semiconductor Fabs in India.
- b) ' Modified  Scheme  for  setting  up  of  Display  Fabs  in  India '  extends  fiscal support of 50% of Project Cost on pari-passu basis for setting up of Display Fabs in India.
- c) ' Modified  Scheme  for  setting  up  of  Compound  Semiconductors  /  Silicon Photonics / Sensors Fab / Discrete Semiconductors Fab and Semiconductor Assembly,  Testing,  Marking  and  Packaging  (ATMP)  /  OSAT  facilities  in India' extends a fiscal support of 50% of the Capital Expenditure on pari-passu basis  for  setting  up  of  Compound  Semiconductors  /  Silicon  Photonics  (SiPh)  / Sensors (including MEMS) Fab/ Discrete Semiconductor Fab and Semiconductor ATMP / OSAT facilities in India.
- d) 'Design Linked Incentive (DLI) Scheme': In addition to the design infrastructure support, 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.
- e) Government  has  also  approved  modernisation  of  Semi-Conductor  Laboratory, Mohali as a brownfield Fab.

4  semiconductor  units  with  cumulative  investment  of  Rs  1,48,746  Cr  have  been  approved under  the  Semicon  India  Programme.Few  states  including  Tamil  Nadu,  have  announced policies  to  promote  investment  in  electronics  and  semiconductor  manufacturing  in  their states.

Further, Government has been implementing following programs focused on development of electronics manufacturing and components ecosystem:

- (i) The  Scheme  for  Promotion  of  Manufacturing  of  Electronic  Components  and Semiconductors  (SPECS)  was  notified  on  01.04.2020  and  was  open  to  receive applications upto 31.03.2024. The scheme provides a financial incentive of 25% on  capital  expenditure  for  electronic  components,  e-waste  recycling,  mechanics, micro/nano-electronic  components,  solar  photovoltaic  (SPV)  polysilicon,  SPV wafers and solar cells, specialized sub-assemblies and capital goods for manufacture  of  aforesaid  goods.  As  of,  30.06.2024,  incremental  investment  of Rs.  8,803.14  crores  had  been  made  under  the  SPECS  scheme.  This  has  led  to production of Rs. 18,083.55 crores till 30 th June,2024
- (ii) Production Linked Incentive (PLI) Scheme for Large Scale Electronics : 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.  The  scheme  extends  an  incentive  of  3%  to  6%  on incremental sales (over  base  year)  of  goods  manufactured  in  India  and  covered under target segments viz. Mobile Phones and Specified Electronic Components, to eligible companies, for a period of 5 years. Till 30th June, 2024, incremental investment of Rs 8,390 Crores had been made under the PLI scheme. This has led to production of Rs 5,14,960 Crores till 30th June, 2024.

The Government has approved the setting up of 4 semiconductor manufacturing facilities in India and 13 semiconductor design companies.

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