22:55
The Union cabinet on Wednesday approved two major manufacturing initiatives with a combined outlay of nearly Rs 1.9 lakh crore (USD 22 billion) to expand India's semiconductor ecosystem, scale up mobile phone production and strengthen its position as a global electronics manufacturing hub.
The government approved the Rs 1.27 lakh crore (USD 14.6 billion) Semicon 2.0 programme to accelerate semiconductor design and manufacturing capabilities, alongside the Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) aimed at increasing domestic production, boosting exports and deepening local value addition in the mobile phone industry.
The semiconductor programme builds on the first phase of the India Semiconductor Mission, and will focus on six key areas: chip design, semiconductor equipment and materials, fabrication facilities, advanced packaging and testing, research and development, and talent development.
"The Union cabinet under the leadership of Prime Minister Narendra Modi has approved Rs 1.27 lakh crore for Semicon 2.0," Minister for Electronics and Information Technology Ashwini Vaishnaw said at a news briefing.
The government expects the new scheme to attract investments of around Rs 4 lakh crore and lead to semiconductor production worth Rs 2 lakh crore during the scheme period.
India is also expected to export chips worth Rs 1 lakh crore.
"Guidelines of the schemes will be published in about 20 days," the minister said.
Vaishnaw said the scheme will support the indigenous production of chips designed in India with domestic ownership.
In contrast to the previous plan, the new scheme will provide incentives in the form of a grant against equity or link them to royalty-based funding.
"The government will mimic proposals of private investors in the chip firms," a Meity official said.
The government has cut incentives for setting up new chip plants from 50 per cent to 40 per cent for silicon fabs and 35 per cent for other fabs.
The Union Cabinet also approved a Rs 62,500 crore Mobile Phone Manufacturing Scheme to provide production-linked incentives to manufacturers over five years from fiscal year 2026-27 to 2030-31, Vaishnaw said.
"We expect to more than double the export of mobile phones to around Rs 15 lakh crore under the new scheme from around Rs 7.5 lakh crore under the previous scheme," the minister said.
Incentives will range from 2.25 per cent to 5 per cent on eligible mobile phone sales, with additional support for domestic sourcing of key components and for Indian companies investing in product design and research.
