Rs 44k cr push for India-made global brands in electronics, semiconductor

India IPO

Updated July 03, 2024

A task force set up by the Ministry of Electronics and Information Technology (Meity) for transforming India into an “electronic and semiconductor products” nation is on the verge of finalising its report, which is likely to recommend an allocation img

A key distinction in the task force's proposal is its focus on benefiting Indian companies exclusively, a departure from the PLI scheme that involves significant participation from global players

Rs 44k cr push for India-made global brands in electronics, semiconductor

A task force established by the Ministry of Electronics and Information Technology (Meity) to transform India into a leading producer of electronic and semiconductor products is close to completing its report. It is expected to propose an allocation of Rs 44,000 crore from 2024 to 2030 to support local companies in developing products and establishing global brands.

According to a panel member, the recommendations include substantial funding: Rs 15,000 crore for electronic products (systems), Rs 11,000 crore for semiconductor products, and Rs 18,000 crore for various other incentives such as talent development, infrastructure, logistics, and technology & IP acquisition. These proposals await government approval and, if approved, would be on a scale comparable to the production-linked incentive (PLI) scheme for mobile devices and electronics.

Formed in January this year and chaired by Ajay K Sood, the principal scientific adviser to the government, the task force includes members like Ajai Chowdhry, founder of HCL and chairman of EPIC Foundation; Sunil Vachani, MD of Dixon Technologies; Sanjay Nayak, former MD of Tejas; Puneet Agarwal, CEO of VVDN Technologies; Aman Gupta, founder of BOAT; Pankaj Mohindroo, chairman of ICEA; Sushil Pal, joint secretary at Meity; along with representatives from key departments.

A significant aspect of the task force’s proposal is its focus on exclusively benefiting Indian companies, unlike the PLI scheme that involves substantial participation from global players. The criteria for defining an Indian company are clearly outlined: Indians must hold 51% of the company’s shares, the company must be headquartered in India, and all global profits and benefits from sales, technology transfer, IP licensing, and investments should benefit the Indian parent company.

Ajai Chowdhry emphasized the rationale behind these criteria, highlighting the financial capabilities of global companies and the necessity for clarity in defining Indian entities. He underscored the initiative’s long-term vision, recognizing the journey to establish India as a leader in design and product development over the next two decades, aiming to mitigate the growing electronics import bill.

The task force also advocates extending the PLI scheme for electronics manufacturing until 2030, refining it based on accumulated insights, reviewing tax policies to foster research & development and testing, and promoting Indian products through branding and subsidies for international trade.

To facilitate global companies interested in designing products in India, the task force proposes removing existing barriers and devising strategies for managing and leveraging standard essential patents (SEPs) to safeguard domestic interests.

Furthermore, the panel has identified 30 electronic products and 40 types of chips crucial for India’s design and branding needs. The report underscores projections that the electronics market could expand to $3 trillion by 2047, with exports potentially accounting for $1 trillion of that total.