SUMMARY
- The government plans to extend the fiscal support period under ISM Phase-II from five to eight years, with additional financial grants for approved projects.
- Phase-II may withdraw support for technology transfer costs, reallocating funds towards administrative expenses to enhance mission efficiency.
- India’s semiconductor market is expected to grow significantly, reaching a market size of $150 billion by 2030, driven by the ‘Make in India’ initiative.
The Indian government is considering extending the fiscal support period under the second phase of the India Semiconductor Mission (ISM) to eight years, up from the current five years, according to an Economic Times report citing a senior government official. This move is aimed at providing a longer runway for the approved projects under ISM Phase-II and enhancing the domestic semiconductor ecosystem.
Under the proposed extension, applicants whose projects are approved in the second phase may also receive additional financial grants. These grants could include provisions for skill training for employees, interest-free loans, and support from the Ministry of Electronics and Information Technology (MeitY) for the preferential supply of domestically manufactured and packaged chips.
However, the government is also planning to make strategic changes in the allocation of funds in the second phase of the mission. While financial support for technology transfer costs may be withdrawn, there could be an increased outlay for administrative expenses. This shift is expected to optimize resource allocation and enhance the overall efficiency of the mission.
The proposed changes come on the heels of recent announcements by MeitY Secretary S. Krishnan, who highlighted the need for additional funding for the semiconductor mission. Launched in 2022, the ISM aims to establish a strong semiconductor and display ecosystem in India, with a focus on positioning the country as a global hub for electronics manufacturing and design. The government had earlier allocated INR 76,000 crore in 2021 for the Semicon India program to provide incentive support to companies in the sector.
Driven by the ‘Make in India’ initiative, the semiconductor market in India is projected to reach $150 billion by 2030, according to Inc42. The initiative aims to reduce dependency on imported components and strengthen the domestic tech ecosystem, positioning India as a key player in the global semiconductor market.
