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India eyeing a key role in semiconductor supply chain: PM Modi

By, Bengaluru
Apr 29, 2022 11:26 PM IST

Modi pointed out that the country was building a digital infrastructure to connect over 1.3 billion citizens, bring 600,000 villages into the broadband net, and investing heavily in upgrading skills and boosting manufacturing.

India is headed for a robust economy and the country’s consumption of semiconductors is expected to cross $110 billion by 2030, Prime Minister Narendra Modi said on Friday, while listing out six key reasons why India is the next big destination for semiconductor technology.

Prime Minister Narendra Modi during the inaugural session of Semicon India Conference in Bengaluru, through video conferencing, in New Delhi on Friday. (PTI)
Prime Minister Narendra Modi during the inaugural session of Semicon India Conference in Bengaluru, through video conferencing, in New Delhi on Friday. (PTI)

He pointed out that the country was building a digital infrastructure to connect over 1.3 billion citizens, bring 600,000 villages into the broadband net, and investing heavily in upgrading skills and boosting manufacturing.

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During his virtual address at the inaugural session of the Semicon India-2022 conference, Modi called upon industry to establish India as one of the key partners in the global semiconductor supply chains and work in this direction based on the principle of “hi-tech, high quality, and high reliability”.

“It is our collective aim to establish India as one of the key partners in global semiconductor supply chains,” he said. “India’s own consumption of semiconductors is expected to cross $80 billion by 2026 and $110 billion by 2030.”

The Union government’s Semicon India Programme, set up to build the semiconductor and display ecosystem in the country, has generated interest among companies with proposals of more than 1.53 lakh crore received in the first round which closed on February 15. Five proposals for semiconductor and display fabs were received with total investment nearing $20.5 billion or 153,750 crore, the ministry of electronics and information technology (MeitY) said in a statement.

 

States such as Karnataka have a large presence of major semiconductor corporations and are working on a sector-specific policy to cash in on the opportunity.

India approved a semiconductor policy in December last year to incentivise a domestic ecosystem for semiconductors and display manufacturing -- in line with the government’s ambition to create a $300 billion electronics industry in next six years, and at a time when electronics supply chains around the world have been affected by a shortage of semiconductors.

Outlining six reasons for India to become an attractive investment destination for semiconductor technologies, Modi said: “We are building the digital infrastructure to connect over 1.3 billion Indians and UPI is the world’s most efficient payment infrastructure today.”

Second, India is paving the way for the country to lead the next “technology revolution”, Modi said. Efforts are underway to try and connect 600,000 villages with broadband and also invest in developing capabilities in 5G, clean energy technologies and internet of things (IoT), he added.

The Prime Minister also said that India is headed for robust economic growth with the world’s fastest-growing startup ecosystem.

Fourth, India has undertaken wide-ranging reforms for improving the ease of doing business in the country. Modi noted that various reform measures taken by the government, such as the abolition of more than 25,000 compliances, a push towards auto-renewal of licenses, transparency and speed in regulatory framework via digitisation, and one of the most favourable taxation structures in the world.

The Prime Minister also underlined that the country is investing heavily in skilling and training young Indians for the needs of the 21st century. “We have an exceptional semiconductor design talent pool which makes up to 20 per cent of the world’s semiconductor design engineers… Almost all of the top 25 semiconductor design companies have their design or Research and Development centers in our country…,” he said.

Lastly, he pointed out that the government has undertaken several measures towards transforming the Indian manufacturing sector. “At a time when humanity was fighting a once in a century pandemic, India was not only improving the health of our people but also the health of our economy,” he said.

The previous government was like a “not gate” whereas the role of the government should be like “and gate”, he added, in a reference to logic gate that form one of the bedrocks of electronics.

“In earlier times, industries were ready to do their work but the government was like a ‘not gate’. When any input flows into the ‘not gate’, it gets negated,” he said. “But, we understand that the government must be like the ‘and gate’. While the industry works hard, the government must work even harder.”

“It (semiconductor industry) is really huge and that is why the government of India is willing to invest 70,000 crore to get this started. During the Covid-19 pandemic, there were supply chain issues and there is a shortage that is affecting many other industries. We import electronic hardware worth $400 billion which is above our oil imports. So, clearly there is a need to have our own domestic semiconductor industry. The importance is very clear,” S Gopalakrishnan (Kris), Infosys co-founder and technology investor with Axilor, told HT.

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