Electronic System Design and Manufacturing Sector – M-SIPS, National Policy on Electronics, etc.

Program for Development of Semiconductors and Display Manufacturing Ecosystem in India


From UPSC perspective, the following things are important :

Prelims level: Read the attached story

Mains level: Semiconductor industry in India

The Union Cabinet has approved a ₹76,000 crore scheme to boost semiconductor and display manufacturing in the country.

About the Program

  • The scheme would provide financial support of up to 50% of the project cost for setting up semiconductor and display fabrication units.
  • The scheme was aimed at making India a global hub of electronic system design and manufacturing, the statement noted.
  • In addition, the Centre would work with the States to set up high-tech clusters with the necessary infrastructure such as land and semiconductor-grade water.

Components of the mission

[1] Semiconductor Fabs and Display Fabs

  • This shall extend fiscal support of up to 50% of project cost to eligible applicants.
  • The govt will work closely with the states establish High-Tech Clusters with requisite infrastructure in terms of land, semiconductor grade water, high quality power, logistics and research.

[2] Semi-conductor Laboratory (SCL):

  • The Ministry of Electronics and Information Technology will take requisite steps for the modernization and commercialization of the Semi-conductor Laboratory (SCL).
  • MeitY will explore the possibility for the Joint Venture of SCL with a commercial fab partner to modernize the brownfield fab facility.

[3] Semiconductor Design Companies:

  • The Design Linked Incentive (DLI) Scheme shall extend product design linked incentive of up to 50% of eligible expenditure and product deployment linked incentive of 6% – 4% on net sales for five years.
  • Support will be provided to 100 domestic companies of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores.

[4] India Semiconductor Mission:

  • In order to drive the long-term strategies for developing sustainable semiconductors and display ecosystem, a specialized and independent ISM will be set up.
  • The ISM will be led by global experts in the semiconductor and display industry.
  • It will act as the nodal agency for efficient and smooth implementation of the schemes on Semiconductors and Display ecosystem.

[5] Chips to start-ups Program

  • This program would develop 85,000 well-trained engineers, he claimed. Semiconductor designers would be given the opportunity to launch start-ups.
  • The government would bear 50% of the expense under the design-linked incentive scheme.
  • The entire programme would lead to 35,000 high-quality direct jobs and 1 lakh indirect employment.

Significance of the scheme

  • In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure.
  • The approved program will propel innovation and build domestic capacities to ensure the digital sovereignty of India.
  • It will also create highly skilled employment opportunities to harness the demographic dividend of the country.
  • Development of semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain.


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