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With the Union Cabinet approving Semicon 2.0 on Wednesday as part of its commitment for a long-term policy support to semiconductors in the country, sources said it is a major push for indigenous chip design and IP ownership and India aims to develop its own intellectual property (IP) in all six critical semiconductor segments, RF, compute, memory, power management, sensors, and network, to strengthen electronics and defence manufacturing.
The sources said that the goal is to move beyond assembly and services toward a 'product nation' with domestic chip design capabilities. They said that the overall vision is to build a complete electronics ecosystem with heavy emphasis on capital equipment, deep-tech startups, and IP creation to reduce import dependence and boost strategic self-reliance (especially for defence applications like drones and missiles). The sources said that the US and other countries are looking at India as a trusted supplier. By 2029, the country is expected to have an inference chip design in India, Make in India. Under Semicon 2.0, incentive only for companies who designed in India, Made in India and brand is owned by India. Referring to the Mobile Phone Manufacturing Scheme (MPMS) approved by the Union Cabinet, the sources said a new incentive scheme (likely under PLI/BMI 2.0) will include a 3% incentive specifically for Indian smartphone brands. This is part of broader tweaks based on learnings from earlier PLI schemes (BMI 1.0, IT hardware). The incentive structure was outlined during the media briefing on cabinet decisions and the scheme guidelines will be detailed soon, sources said. The government is focusing on the component ecosystem and the emphasis is on building a full domestic components ecosystem, the sources said. The new policy aims to manufacture most components locally over time. There is a strong focus on attracting capital equipment, chemical, gas, and material manufacturers. The sources said that Indian brands must compete on better quality and lower cost. The policy supports Indian players while noting that global majors design their own chips, while others use standard chips. Indian firms are being encouraged to leverage this. The sources said that BMI 2.0 and related schemes are designed strictly as per industry needs rather than government assumptions. These are based on key lessons, clearly define national objectives, address specific industry challenges (design, distribution, talent), and align incentives accordingly. Industry inputs shaped the latest version heavily. GCCs would spin off or create separate product teams/startups for chip design and manufacturing, they said. India hosts about 7% of the world's Global Capability Centres (GCCs) in the semiconductor domain and employs nearly 20% of the global semiconductor chip design workforce. Sources said there is no conflict seen with existing outsourced design work for global firms and the aim is to create conditions for Indian companies to own IP. The sources also said that WhatsApp and Telegram have submitted replies on the username policy matter. They said the government is examining legal implications and possible clauses to invoke sanctions or actions. A formal notification is expected. The Union Cabinet on Wednesday approved the Semicon 2.0 for the development of India's semiconductor design and manufacturing ecosystem, with a total budget outlay of Rs.1,27,500 crore. Recognising the requirement for sustained and long-term support to the semiconductor sector in India and also to build on the momentum generated under Semicon1.0, Semicon 2.0 aims to further the Government's commitment towards putting our country on the semiconductor map of the world. Semicon 2.0 is aimed to holistically build the semiconductor ecosystem on the following six pillars - Design, Machines and materials, Setting up more fabs, strengthening ATMP/OSAT industry, Research & Development and Talent development. Semicon 2.0 will support economic growth across all sectors, strengthen national security through enhanced supply chain resilience, and help establish technological leadership in critical sectors. The approach of building the complete ecosystem, will catalyse semiconductor design and manufacturing in India. So far, twelve (12) manufacturing units have been approved with a cumulative investment of over Rs.1.64 Lakh crore. The Union Cabinet also approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore. During the scheme tenure, the cumulative mobile phone production in the country is expected to reach approximately Rs 39,00,000 crore with significant increase in exports of mobile phones. The Scheme is also expected to generate around 60,000 direct jobs thereby contributing to economic growth, employment generation and strengthening India's position in global electronics manufacturing hub. The Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) has played a transformative role in establishing India as a global hub for mobile manufacturing and exports. The tenure of PLI-LSEM ended on March 31, 2026. (ANI)
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