Why India is an Attractive Investment Destination of Semiconductor technologies
Semiconductors are playing a critical role in the world in more ways than we can imagine. It is our collective aim to establish India as one of the key partners in global semiconductor supply chains. We want to work in this direction based on the principle of Hi-tech, high quality and high reliability.
I see six reasons for India being an attractive investment destination for Semiconductor technologies.
First, we are building the digital infrastructure to connect over 1.3 billion Indians. You have all heard of India’s financial inclusion, banking and digital payment revolution. UPI is the world’s most efficient payment infrastructure today. We are using digital technology to transform lives in all sectors of governance from health and welfare to inclusion and empowerment. We are one of the largest consumers of data per capita. And we continue to grow.
Second, we are paving the way for India to lead the next technology revolution. We are on our way to connect six hundred thousand villages with broadband. We are investing in developing capacities in 5G, IoT and clean energy technologies. We are working to unleash the next wave of innovation in data, AI and other technologies.
Third, India is headed for robust economic growth. We have the world’s fastest growing Startup Ecosystem. New unicorns are coming up every few weeks. India’s own consumption of Semiconductors is expected to cross 80 billion Dollars by 2026 and 110 Billion Dollars by 2030.
Fourth, we have undertaken wide ranging reforms for improving ease of doing business in India. Last year, we abolished more than 25,000 compliances and gave a push towards auto-renewal of licenses. Similarly, digitization is also bringing speed and transparency to the regulatory framework. Today, we have one of the most favorable taxation structures in the world.
Fifth, we are investing heavily in skilling and training young Indians for the needs of the 21st century. We have an exceptional semiconductor design talent pool which makes up to 20% of the world’s semiconductor design engineers. Almost all of the top 25 semiconductor design companies have their design or R&D centers in our country.
And Sixth, we have undertaken several measures towards transforming the Indian manufacturing sector. At a time when humanity was fighting a once in a century pandemic, India was not only improving the health of our people but also the health of our economy.
Our ”Production Linked Incentives” schemes offer incentives of over 26 billion Dollars in 14 key sectors. Over the next 5 years, the electronics manufacturing sector is expected to see record growth. We recently announced the Semi-con India Programme with a total outlay of over 10 billion dollars. This program aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. We are aware that in order for a semiconductor ecosystem to flourish, it is necessary to ensure adequate support from the Government. Allow me to put our approach in the language of semiconductors itself. In earlier times, industries were ready to do their work but the government was like a ”Not Gate”. When any input flows into the ”Not Gate”, it gets negated. So many needless compliances and no ‘ease of doing business.’ But, we understand that the government must be like the ”And Gate”. While the industry works hard, the government must work even harder. I would like to assure you that we will continue to support the industry in future as well. We have taken care to see that the Semi-con India programme addresses various parts of the ecosystem such as semiconductor fab, display fab, Design, Assembly, Test, Marking and Packaging of semiconductors.
A new world order is forming and we must seize this opportunity. We have worked hard over the last few years to create an environment that encourages growth. India has the appetite for tech and risk-taking. We have put the odds in your favour as far as possible through a supportive policy environment. We have shown that India means business! Now, it’s over to you.
I look forward to practical suggestions from all of you about how we can move towards an India that is a hub for Semiconductors for the world in the coming years. We aim to engage with domain experts. We will work with stake-holders to understand what more can be done to build a vibrant semiconductor ecosystem.
(Excerpts of Prime Minister Narendra Modi’s address on April 29 at inaugural session of the Semicon India Conference 2022)