Govt aid for semiconductor projects to continue, design-linked sops to expand: IT Secretary

New Delhi: Critical semiconductor production projects may continue to get up to 70 percent of total project cost as incentive from the Centre as well as states, a senior government official said on Tuesday.

Speaking at the Semicon India event, Electronics and IT Secretary S Krishnan said that 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.

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

The central government has been giving 50 percent capital support while the state government gives incentives of around 20 percent 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 percent of the cost of a particular project. This 70 percent 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, display fabs, etc 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," Krishnan said.

Earlier in the day, Prime Minister Narendra Modi announced that the government is working on a new semiconductor mission as well as DLI scheme.

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 startups 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 startups engaged in semiconductor design get up to USD 2 million in grant from the government under 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 scope for DLI scheme will give a major boost to the ecosystem.

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