In a significant move aimed at promoting domestic manufacturing and attracting investments in the electronics and IT sectors, the Union Cabinet of India has been granted the authority to approve the establishment of compound semiconductors and display fabs assembly and test units. This decision announced through a government notification on June 10, transfers the approval process from the Ministry of Electronics and IT (MeITY) to the highest decision-making body in the country. The aim is to streamline the decision-making process and provide a centralized and efficient system for evaluating and promoting the development of these critical technologies in India.
Union Cabinet Takes Charge of Approvals:
Previously, the responsibility of granting approvals for applications under the production-linked incentive (PLI) scheme, valued up to Rs 100 crore, rested with the MeITY Secretary. Applications exceeding this threshold were evaluated by the Union Minister for Electronics and IT. However, the recent notification from the MeITY has removed this categorization and placed the authority solely with the Union Cabinet. This change empowers the Cabinet to evaluate and approve applications of all values under the PLI scheme.
Streamlining the Approval Process:
Under the modified PLI scheme, officially named the “Modified Programme for Semiconductors and Display Fab Ecosystem,” the government aims to attract global investors by offering attractive incentive support. Initially launched in December 2021 with a total outlay of Rs 76,000 crore, the scheme underwent revisions in September of the following year to make it more appealing. Previously, the incentives provided varied from 30% to 50% fiscal support. However, the government later made the support uniform by committing to fund 50% of the project cost across all technology nodes for the establishment of semiconductor fabs. This includes advanced computing chips as well as those utilized in sectors such as power, telecom, and automotive.
Advantages of Cabinet-led Approvals:
By transferring the approval authority to the Union Cabinet, the decision-making process is expected to become more streamlined and efficient. The centralized system will eliminate the need for multiple levels of evaluation and ensure a cohesive approach to evaluating applications. This move also reinforces the government’s commitment to promoting domestic manufacturing and creating a conducive environment for investments in the electronics and IT sectors. By providing a clear and efficient approval process, the Union Cabinet aims to attract global companies to set up compound semiconductor and display fabs in India, contributing to the growth of the indigenous electronics industry.
Unlocking India’s Technological Potential:
The decision to empower the Union Cabinet with the authority to approve applications for compound semiconductors and display fabs under the PLI scheme signifies the Indian government’s recognition of the critical role these technologies play in driving innovation and economic growth. Compound semiconductors are key components in various industries, including telecommunications, automotive, and renewable energy. By establishing the necessary infrastructure and manufacturing capabilities, India can reduce its dependence on imports and foster the development of a self-reliant semiconductor ecosystem.
The government’s focus on display fabs aligns with the increasing demand for advanced display technologies, including OLED and microLED, in smartphones, televisions, and wearable devices. With the Union Cabinet’s involvement, India can position itself as a hub for display fab manufacturing, attracting global players and stimulating technological advancements in this field.
Strengthening India’s Electronics Industry:
The decision to centralize approval authority under the Union Cabinet is a strategic move to strengthen India’s electronics industry. By encouraging the establishment of compound semiconductors and display fabs, the government aims to create a robust ecosystem that fosters research, innovation, and high-value manufacturing. This will not only boost the country’s GDP but also generate employment opportunities and contribute to skill development in advanced technologies.
Additionally, by reducing the bureaucratic layers involved in the approval process, the Union Cabinet’s involvement will expedite the implementation of projects, allowing for faster technology deployment and market entry. This agility is crucial in the fast-paced global electronics industry, ensuring that India remains competitive on the world stage.
Conclusion:
The decision to empower the Union Cabinet with the authority to approve applications for compound semiconductors and display fabs under the PLI scheme marks a significant step towards streamlining the decision-making process in India. By eliminating the categorization based on application value and centralizing the approval authority, the government aims to provide an efficient and cohesive system for evaluating and promoting these critical technologies. This move aligns with the government’s vision to strengthen domestic manufacturing and attract investments in the electronics and IT sectors. With the Union Cabinet taking charge, India is poised to create a conducive environment for technology development, innovation, and economic growth in the field of semiconductors and display fabs. This strategic initiative will unlock India’s technological potential and contribute to the country’s journey towards self-reliance and global competitiveness in the electronics industry.
