India Boosts Semiconductor Industry with Major Budget Allocations

The Indian government has set aside Rs 6,903 crore for semiconductor projects, including Rs 4,203 crore for discrete semiconductor manufacturing and assembly, as part of a strategy to bolster local value addition in the electronics industry. Key industry players have welcomed these budgetary allocations, citing their importance for growth and global competitiveness.

In a significant move to enhance local value addition in manufacturing, the Indian government has earmarked Rs 6,903 crore for semiconductor projects and slashed duties on raw materials for electronic components. According to the budget document, the government plans to allocate Rs 4,203 crore for projects under a modified scheme for setting up compound and discrete semiconductor manufacturing and assembly units in the country.

The Union Budget proposes to allocate Rs 1,500 crore for electronic chip plants, Rs 100 crore for electronic displays, and Rs 900 crore for modernizing the Semi-Conductor Laboratory in Mohali. Additionally, Finance Minister Nirmala Sitharaman announced tax reductions on certain electronic parts and raw materials used in manufacturing.

Industry leaders have hailed these initiatives. Hitesh Garg, VP and India Managing Director of NXP Semiconductors, noted the industry's 52 percent increase in the 2024-25 allocation as crucial for India's ambitions in global electronics manufacturing. Pankaj Mohindroo, Chairman of the ICEA, and Rajoo Goel, Secretary General of ELCINA, also praised tariff concessions and exemptions as essential steps toward a strong domestic semiconductor ecosystem.

(With inputs from agencies.)