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India: New Focus on Developing Semiconductor Industries.


Indian budget presented in Parliament in 2019 is different from the previous budgets. It is inspired by the East rather than the West for rapid economic growth this time. If a mark of 5 trillion dollars of GDP is to be achieved from the current level of 2.7 trillion dollars of GDP, then some innovative thinking must go in the new budget. Apart from many innovative provisions in the budget, the most striking features of the budget in the industry sector are focused on setting up mega-manufacturing plants in sunrise and advanced technology areas such as Semi-conductor Fabrication (FAB), Solar Photo Voltaic cells, Electric Vehicles, Lithium storage batteries, Solar electric charging infrastructure, Computer Servers, Laptops, etc. 


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 India made rapid progress in software development but lacked substantially in hardware development and manufacturing. When entire gamut of socio-economic activities are heavily being penetrated by digital means and global industries are migrating towards Industry 4.0 which is considered as Fourth Industrial Revolution which requires massive deployment of semiconductor hardware and software, India is heavily dependent on import for hardware. Incidentally, the government’s track record in nurturing semi-conductor hardware industry in India was not quite heartening. The only public sector semiconductor unit, Semiconductor Complex Ltd (SCL) set up in Chandigarh in 1984, was destroyed in a fire in 1989. Till date, it’s a mystery whether it was a malicious act or an accident. After this incident, the government did not rebuild SCL to the best global standards. It has also been alleged that there had been reverse protection of semiconductor industry in this country. Many experts believe that strongly entrenched lobby has hindered hardware manufacturing. Many late entrants in semiconductor industries like Taiwan, South Korea, Malaysia, Singapore and China did a miracle by importing semiconductor technology at a very high premium. 


However, it's better late than never. Now India has embarked on a new mission to go in a big way to manufacture semiconductor hardware. It will give a big boost to solar PV industries, Electric Vehicles which is in a nascent stage of manufacturing and consumer electronics in general. Manufacturing of Solar PV Modules, Li Storage Batteries and Electric Cars are gaining momentum globally to increase the share of renewable energy in energy portfolio and electric mobility in transport portfolio in the wake of the looming threat of climate change. Therefore, a big in-house, as well as an export market, exists for Solar PV, Lithium Storage Batteries, Solar Electric Charging Equipment and Electric Vehicles. To boost the use of Electric Vehicles government in this budget has already announced incentive in the form of tax rebate. If the vision of setting up of manufacturing facilities of sunrise and advanced technology such as semiconductor, Solar PV and Electric Vehicles and allied products is implemented properly, the industrial landscape of India will change drastically in a decade.



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