​Promise of chips, Pg8

Key Highlights:

• The second phase of the India Semiconductor Mission (ISM) has an outlay of ₹1.27 lakh crore.
• This phase aims to position India as a strategic destination for the electronics value chain.
• The government will provide capital subsidies and manufacturing-linked incentives to select projects.
• The mission focuses on developing domestic capabilities in human capital and intellectual property.

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Detailed Insights:

• The corpus for India Semiconductor Mission (ISM) Phase 2 significantly surpasses that of the first phase.
• The government's share in capital subsidies will be less than the 50% offered in the initial phase.
• Manufacturing-linked incentives will be provided based on per-unit sales of manufactured goods.
• Additional incentives are promised for products that leverage domestic capabilities and components.
• The initiative is considered a long-term project, crucial for India's strategic autonomy in a geopolitically sensitive environment.
• Commercial production from projects approved in the first phase of the mission is yet to commence.
• Technologies like extreme ultraviolet lithography are highly complex and remain challenging even for advanced economies.
• India aims to capitalize on its talent pool of semiconductor engineers and designers, who are in global demand.
• The mission seeks to build resilience against supply chain shocks and stimulate economic growth.

Key Concepts Involved:

• India Semiconductor Mission (ISM): A government initiative to foster a comprehensive semiconductor and display manufacturing ecosystem in India.
• Capital Subsidy: Financial assistance provided by the government to reduce the initial investment costs for businesses.
• Manufacturing-linked Incentives (MLI): Government incentives offered to manufacturers based on their production and sales performance.
• Electronics Value Chain: The complete sequence of activities involved in bringing an electronic product to market, from design to distribution.