The Indian government is trying to compete with China and Southeast Asia for investment in chip production.
According to Nikkei, India on December 15 approved an incentive plan worth 760 billion rupees (about 9.94 billion USD) to boost domestic production of semiconductors and display screens, an effort to gain a large foothold. in the global electronics sector.
The Government of India will support half of the amount in the aid package for eligible manufacturing projects. Previously, the country had set aside 553 billion rupees to promote large-scale production of electronic goods and 980 billion rupees to promote the production of advanced batteries, auto components, and telecommunications products.
“The incentive scheme will promote domestic value addition in electronics manufacturing and will significantly contribute to the achievement of a $1 trillion digital economy,” the Indian government said in a statement.
India has made great strides in the field of automobile manufacturing, industrial and pharmaceutical goods, becoming two car manufacturers, tricycle, and the largest drug world. However, the Asian giant still lags behind in the electronics sector, despite strong growth in global demand.
India’s Minister of Electronics and Information Technology Ashwini Vaishnaw told reporters on December 15 that the support plan “is a historic decision taken by Prime Minister Narendra Modi. It will help build a complete semiconductor development ecosystem including design, fabrication, packaging, and testing.”
According to estimates by the Mobile and Electronics Association of India, in the financial year ended March 2021, electronics accounted for only 4.9% of India’s exports, much lower than China’s 33.3%. Quoc and 44.1% of Vietnam. China’s electronic export value in the same year was 81 times higher than India’s, while that of Vietnam was 11 times higher.
In 2019, India announced a National Policy on Electronics aimed at making the country a global hub for electronics manufacturing, with a target of reaching $400 billion in revenue by 2025. The plan is expected to domestic production of 1 billion mobile phones by 2025, worth $190 billion.
The series of incentives announced then prompted smartphone makers, including Apple and Chinese companies like Xiaomi and Oppo, to commit to manufacturing in the South Asian country. Apple’s Taiwanese manufacturing partners Foxconn and Pegatron have built factories in the state of Tamil Nadu. ‘s Samsung South Korea also set up a display manufacturing unit in the state of Uttar Pradesh, as part of a plan to reduce dependence on China.
However, the lack of domestic production capacity has caused manufacturers in India to continue to import components such as chipsets, displays, camera modules, and image sensors from China and South Korea. , Vietnam, Japan, and the US.
According to Mr. Vaishnaw, the government has a “20-year roadmap” to create 85,000 “highly qualified and well-trained engineers”. Mr. Vaishnaw claims about one-fifth of the engineers in the semiconductor industry global come from India.
“Almost all major economies are currently offering almost 50% capital incentives for the establishment of semiconductor factories and we will also offer similar incentives. We also offer a very clear 20-year roadmap where the focus is on creating talent, nurturing talent, and ensuring that as the industry grows, there will be a sufficient number of highly trained engineers. good to make that journey. This will give us a bigger advantage,” said Vaishnaw.