In a landmark move, the Union Cabinet approved the comprehensive Semicon India programme in 2021, committing a substantial financial outlay of INR 76,000 crore. This ambitious initiative is geared towards developing a robust and sustainable semiconductor and display ecosystem in India, reflecting the country’s growing strategic focus on this critical technology sector.
Launched in 2022, the India Semiconductor Mission (ISM) aims to build a formidable semiconductor ecosystem within the country. This mission has gained renewed importance due to recent global supply chain disruptions that have highlighted the crucial role of semiconductors in modern electronic devices. As the world grapples with these disruptions, India’s push to establish a strong domestic semiconductor industry becomes even more critical.
Fast forward to 2024, and the semiconductor industry in India is experiencing a significant uptick in demand for skilled professionals. Current estimates suggest that the sector will need between 40,000 to 50,000 new employees across various job roles to meet its growing needs. This surge in demand underscores the vital role that a well-trained workforce will play in the industry’s expansion.
To support this growth, the Indian government has introduced several initiatives. The Design Linked Incentive (DLI) Scheme, for instance, offers product design linked incentives of up to 50% of eligible expenditure. Additionally, it provides product deployment linked incentives of 6% – 4% on net sales for five years. These incentives are designed to encourage both domestic and international semiconductor design companies to invest in and enhance their operations in India.
One of the key benefits of establishing semiconductor fabrication plants (fabs) within India is the enhancement of the country’s leverage and bargaining power in the global supply chain. By controlling a crucial segment of the technology chain, India not only strengthens its economic position but also bolsters national security. Domestic semiconductor production reduces the nation’s dependence on imports, thereby mitigating risks related to supply chain disruptions and geopolitical tensions.
Furthermore, the government is planning to bolster the semiconductor sector through the creation of a Graphics Processing Unit (GPU) cluster as part of the India AI program. Announced by Union Minister Rajeev Chandrasekhar on September 22, this initiative is designed to support the growth of startups focused on training artificial intelligence models within India. The government plans to extend support to both domestic startups and international companies interested in fostering indigenous intellectual property related to chip design for AI applications. This support will be facilitated through an INR 11-12 billion (US$132.61 million-US$144.67 million) design-linked incentive scheme.
Looking ahead, the semiconductor industry in India is expected to create a significant number of jobs. Industry stakeholders predict that the sector will generate approximately 1.2 million job opportunities across a wide range of roles, including engineers, operators, and technicians. This job creation is set to accelerate as manufacturing processes advance and design functions evolve, providing a substantial boost to the Indian economy.
India’s strategic investments and policy initiatives in the semiconductor sector are poised to transform the country’s technological landscape. With robust support mechanisms in place and an expanding job market, India is well on its way to becoming a global hub for semiconductor innovation and production, driving forward its aspirations of technological self-reliance and economic growth.
