Indian government is reportedly working on a package to push semiconductor production in India

• The Indian government is reportedly working on a multi-billion-dollar package to promote semiconductor manufacturing in India.
• Companies like TSMC, Intel and AMD are some of the companies that are part of the discussions.
• The demand for semiconductors in India is expected to reach $100 billion by 2025.

The Indian government is reportedly working on a multi-billion-dollar capital support and production linked incentive (PLI) plan to promote manufacturing of semiconductors in the country.

According to a TOI report, senior officers from the government are currently in active discussions with some of the top semiconductor manufacturers such as Taiwan Semiconductor Manufacturing Co. (TSMC), Intel, AMD, United Microelectronics Corp and Fujitsu.

“The government is willing to talk capital support. We are closer to it like never before,” said a source part of the process.

As per the report, the push to bring semiconductor manufacturers to India is being coordinated and closely monitored by the Prime Minister’s Office. Multiple ministries have been tasked with coming up with an attractive policy to bring the companies to the country.

“The idea is to have representatives from various ministries and departments who are in charge of industries that are impacted by the semiconductor shortage,” the source added.

The support to be provided by the government is expected to include financial support on capital expenditure and tariff cuts on certain components. The government may also offer additional benefits from schemes like Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and PLI.

As India does not produce any semiconductors, the country’s demands are met with imports. The demand for semiconductors in India will reportedly reach around $100 billion by 2025, up from the current demand of $2 billion.

While earlier attempts to attract semiconductor manufacturers to the country have failed, the government is confident that a large and fast-growing electronics market and requirements in other sectors such as defence and auto will push the companies to invest in India.

“The domestic demand is going to be very high. The government expects domestic production of electronics to move up to $350-400 billion by 2025, against the estimated $75 billion now. This will be a big enabler to get in investments,” the source added.

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