India recently approved a Rs 76,000 crore PLI program to boost semiconductor and display manufacturing. (Photo: Reuters)
The government’s focus on increasing semiconductor production in India could go a long way in making the country a global hub for electronics, in addition to creating jobs and attracting investment from the best. companies around the world.
The government on Wednesday approved a Rs 76,000 crore production-linked incentive program (PLI) to boost semiconductor and display manufacturing – a move that experts say will strategically benefit India , especially at a time when the whole world is facing a semiconductor shortage. .
While India has tried or at least expressed interest in increasing semiconductor production in the country in the past, this is the first time that a program has been approved to boost semiconductor manufacturing that makes integral part of modern technological products, including cars, electronic gadgets and even medical devices.
HOW THE DIAGRAM WILL HELP INDIA?
In addition to helping the country reduce its dependence on imports, the program to boost semiconductor production will lead to massive investments and create a large number of jobs.
It is estimated that the program will create 35,000 skilled jobs, in addition to one lakh of indirect employment opportunities. This could also generate investments to the tune of Rs 1.7 lakh crore.
Union Minister Ashwini Vaishnaw said the program will spur the development of a complete semiconductor ecosystem, from design to manufacturing, packaging and testing.
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The program to boost domestic semiconductor manufacturing has considerable strategic advantages, considering factors such as low labor costs and large production capacity. This would not only help domestic companies reduce their dependence on semiconductor imports, but also generate income from exports to other countries.
Although the benefits of the program will take at least 3-5 years to materialize, it will ensure that there is no sudden shortage of chips that trigger massive price hikes in various segments of electronics, cars and high-tech products.
As it stands, stakeholders have welcomed the program and asked for more clarity on how it will help the sector. Stakeholders also want to know whether states will be allowed to extend additional incentives to boost semiconductor manufacturing.
The program comes at a time when the world faces a severe semiconductor shortage due to supply disruptions triggered by the prolonged impact of the Covid-19 pandemic.
As a result, several Indian companies, from automakers to electronics manufacturers, have been forced to cut production. The shortage has not only hurt businesses, but also customers who bear the burden of higher input costs.
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Therefore, the PLI program to boost semiconductor manufacturing comes at a crucial time as it will not only help domestic companies but also open a window of opportunity for Indian chipmakers to become globally competitive. .
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