Another government source said that the decision on how to disrupt the cash incentive has not yet been made and the government has sought feedback from the industry.
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Two officials said that India is giving more than $ 1 billion in cash to each semiconductor company, which sets up manufacturing units in the country.
Prime Minister Narendra Modi’s ‘Make in India’ campaign has helped transform India into the world’s second largest mobile manufacturer after China. New Delhi believes that it is time for chip companies to be established in the country.
A senior government official cited Reuters as not being authorized to talk to the media, saying, “The government will give a cash incentive of more than $ 1 billion to each company that will set up a chip fabrication unit.”
“We are assuring them that the government will be a buyer and there will also be a mandate in the private market (for companies to buy chips locally).”
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Another government source said that how to end the cash incentive has not been decided yet and the government has sought feedback from the industry.
Governments around the world are subsidizing the construction of semiconductor plants as chip shortages affect the auto and electronics industries and highlight the world’s dependence on Taiwan for supplies.
India wants to establish reliable suppliers to its electronics and telecommunications industry to cut dependence on China after border skirmishes last year.
Locally made chips will be designated as “reliable sources” and can be used in products ranging from CCTV cameras to 5G equipment, the first source said.
But sources did not say whether the particular semiconductor companies have shown interest in setting up units in India.
India’s Ministry of Technology did not respond to the request.
Previous attempts
India has tried to woo semiconductor players before, but firms were hurt by India’s infrastructure, unstable power supply, bureaucracy and poor planning.
Industry experts say the government’s renewed efforts to woo chipmakers are likely to succeed.
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In addition, Indian conglomerates, such as the Tata group, have also expressed interest in electronics and high-tech manufacturing.
India invited an “expression of interest” from the chipmaker in December to set up fabrication units in the country or to acquire such manufacturing units abroad by an Indian company or consortium.
The government extended the deadline for submission to that expression of interest from March 31 to March 31, given the level of demand from the industry.
An auto industry source said that a consortium of investors led by Abu Dhabi-based Fund Next Orbit Ventures has shown interest in setting up in India.
The next class did not respond to a request for comment.
Chips shortage is holding India’s auto sector back when it sees early signs of improvement in post-sales demand due to an epidemic in 2020.
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Officials of the Indian Ministry of Technology met with officials of the Society of Indian Automobile Manufacturers (SIAM) to assess car makers’ demand for chips earlier this year, with three auto industry sources stating anonymity Said on
Sources in the auto industry said that the government estimated that it would cost around $ 5-7 billion to set up a chip manufacturing unit in India and 2-3 years after all the approvals, the auto industry sources said.
The source said that New Delhi is willing to give concessions to companies including rebates on customs, research and development expenses and interest-free loans.
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