Introduction:
Initiated in 2014, the ‘Make In India’ campaign by the Indian government aims to bolster domestic manufacturing, emphasizing self-reliance for economic growth and job creation, with a particular focus on critical sectors such as semiconductors.
Factors Hindering Semiconductor Manufacturing Growth:
- Infrastructure Gap: India’s semiconductor industry grapples with infrastructural limitations, particularly in wafer fabrication facilities. As of 2022, India contributes only 0.3% to global semiconductor production.
- Investment Shortfall: Inadequate investments in research and development (R&D) and manufacturing facilities impede sector expansion, with India accounting for a mere 0.7% of global R&D expenditure in 2022.
- Skilled Workforce: The semiconductor sector faces a scarcity of skilled labor, particularly in design and manufacturing, with a skill gap of approximately 200,000 engineers.
- Regulatory Complexities: Cumbersome regulatory processes and unclear policies act as deterrents for investors, with India ranking 63 out of 190 countries in ease of doing business as of 2022.
Measures to Promote Semiconductor Manufacturing:
- Production-Linked Incentive (PLI) Scheme: Allocating INR 40,995 crore for electronics, including semiconductors, this scheme provides percentage-based incentives on incremental sales, fostering domestic production and reducing import dependency.
- Electronics Manufacturing Clusters (EMC) Scheme: Introduced in 2012, this initiative funds electronics infrastructure, supporting common facilities and clusters, with up to 50% funding for projects aimed at reducing bottlenecks.
- Skill Development: The Skill India initiative targets 40 crore skilled workers by 2022, with specific programs by the Electronics Skill Council focusing on semiconductor skills, contributing to a skilled workforce for manufacturing and technology.
- National Electronics Policy (NEP): Aiming for a competitive electronics ecosystem, NEP targets a $500 billion turnover by 2022, promoting research and development and indigenous production across industries, including semiconductors.
Conclusion:
Addressing the significant challenges faced by India’s semiconductor manufacturing sector necessitates focused interventions that enhance infrastructure, foster research, and skill development, and streamline regulations, enabling effective progress in this crucial industry.
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