Indian Government Sets Aside Rs 2.3 Lakh Crore To Boost Production Of Semiconductor And Other Electronic Components

The incentives could boost the adoption of latest technology in mass market cars, especially electric vehicles

The Indian government has set aside Rs 2.3 lakh crore (USD 30 billion) to incentivise the manufacturing of semiconductors and other electronic components in India. The world has been facing a shortage of semiconductors over the past few months, which has seen carmakers slow down production. Electronics such as smartphones and laptops have been hit as well by the semiconductor shortage.

Out of the Rs 2.3 lakh crore, Rs 76,000 crore (10 billion USD) has been set aside for producing semiconductors and displays alone. The money will be used to incentivise all parts of the supply chain, including electric components, sub-assemblies and finished goods. Rs 55,392 crore (7.5 billion USD) have been set aside for PLI (production linked incentive) for Large Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. PLIs worth Rs 98,000 crore (13 billion USD) have also been set aside for allied sectors comprising ACC battery, auto components, telecom & networking products, solar PV modules and white goods.

Currently, India is dependent on foreign countries to meet its need for semiconductors. Once manufacturing plants are set up in India, the cost of producing an electronic device should significantly come down. This move is also expected to create a lot of high-skilled jobs in the country.

Also See: Latest Electric Cars In India

Most of all though, it will help quicken the process of technology trickling down from the premium segments towards more mass market models. Semiconductors, displays and batteries are some of the items the government is willing to incentivise, and this will heavily boost the auto industry in India. If things go according to plan, this incentive package could boost the adoption of electric vehicles in India as well.