Critical semiconductor production projects may continue to get up to 70 per cent of total project cost as incentive from the Centre as well as states, electronics and IT secretary S. Krishnan said on Tuesday.

Speaking at the Semicon India event, the secretary said the government is looking to expand benefits under the design linked incentive (DLI) to support larger domestic companies as well as enhance grants provided under it.

Krishnan said the support that India provides for semiconductor projects is unprecedented and a total of around $30 billion in incentive and various other benefits is under implementation.

The central government has been giving 50 per cent capital support while the state government gives incentives of around 20 per cent of the total project cost.

“I’ve never come across in all these years a programme which is as generous as industrial policy support which almost amounts to 70 per cent of the cost of a particular project.

“This 70 per cent is disbursed on a pari-passu basis... assistance of this level will definitely continue for certain segments which are crucial and important,” Krishnan said. He said semiconductor, fabs and display fabs are crucial for the country.

“Display fabs are still an area we are looking out for. In the ISM (India Semiconductor Mission) -2 , that will be a crucial element to what we will be looking for, and various other devices which are a critical area of focus for us,” he added.

Krishnan said DLI is one of the key programmes which we will be looking to expand in the days to come.

“Thus far, it (DLI) has been confined to start-ups and to SMEs. We are looking to expand that scope. Likewise, we are looking to expand the kind of assistance we will be providing for this particular incentive scheme, both in terms of a grant and also improving access to risk capital,” Krishan said.

At present, MSMEs and start-ups engaged in semiconductor design get up to $2 million in grant from the government under the DLI scheme.

A presentation by Krishan at the event showed that the new DLI scheme may see support for large domestic semiconductor design firms as well.

MediaTek India managing director Anku Jain said that the semiconductor industry in India has seen tremendous policy support in the last 4-5 years and the government move to expand the scope for the DLI scheme will give a major boost to the ecosystem.

Growth story

Prime Minister Narendra Modi, who inaugurated the flagship event ‘Semicon India - 2025’ conference, aimed at catalysing India’s semiconductor ecosystem, in New Delhi, observed that semiconductor projects worth over $18 billion were underway and the country was advancing towards the next phase of the India Semiconductor Mission and revamping the design-linked incentive scheme to tap the $1 trillion global chip market.

“The day is not far when the smallest chip made in India will drive the biggest change in the world,” he said.

Speaking at the same event, electronics and IT minister Ashwini Vaishnaw highlighted the significant progress made by India in three and a half years since the launch of the ISM.

“In a short span of three and a half years, we have the world looking at India with confidence. Today, construction of five semiconductor units is going on at a rapid pace,” he said.