Govt Unlikely To Roll Out Another Round Of Semiconductor Subsidy This Year Even Though $10B Scheme Dries Up: Report

The Indian Government likely won’t be announcing a second semiconductor subsidy scheme this year. This comes despite the fact that 78% of the initial ₹76,000-crore ($10 billion) scheme has already been committed to four projects in the past year.

What Happened: The Ministry of Electronics and Information Technology (MeitY) is planning to delay seeking additional funds for a second scheme until a significant portion of the first scheme’s disbursals have been made, Moneycontrol reported, citing sources. The second scheme is expected to primarily focus on the chip design ecosystem and facilitate the domestic production of at least 10 chipsets.

The first semiconductor proposal to be approved under the capex-linked subsidy scheme was Micron's $2.75 billion (around ₹22,981 crore) chip packaging plant in Sanand, Gujarat, announced in June last year. Three more semiconductor manufacturing proposals were given the green light in March this year.

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The government estimates that these four projects will consume around ₹59,000 crore from the ₹76,000-crore semiconductor scheme. Additional proposals are reportedly being considered from companies like Zoho, HCL and Israeli chip company Tower.

However, the next iteration of the semiconductor plan is unlikely to be launched until the next fiscal year’s budget. “Fiscal objectives have to be always balanced… The government has to give equal attention to everyone,” a person close to the developments told the publication.

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