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21/04/2022 - Government Policies

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April 21, 2022

Despite its challenges, chip manufacture has practical as well as strategic advantages for India in its current situation. Explain (200 Words)

Refer - Financial Express

Enrich the answer from other sources, if the question demands.

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IAS Parliament 2 years

KEY POINTS

·        As part of its recent, more wide-ranging PLI scheme, the Centre announced incentives of Rs 2.3 trillion in  2021, specifically for an “India Semiconductor Mission.

·        The incentives needed from the government may ultimately need to be much larger than the initial commitments.

·        India’s need to create more “good” jobs is so great that making a push in more than one sector also makes sense.

·        Chip manufacturing might also be complementary to manufacturing that mostly involves assembly, including an increasing number of products that use semiconductors whether they be advanced microprocessors or basic memory chips.

·        There will be significant challenges and the Centre has to be prepared for a long haul. But if global expertise can be tapped quickly and appropriately and all aspects of the needed infrastructure can be provided, chip making could be the ramp that allows Indian manufacturers to grow, providing important components for other products, such as cars or medical devices.

·        A final benefit to note is that even for relatively commoditised segments of the semiconductor market, the value-to-weight ratio is relatively favourable, meaning that bottlenecks in roads and ports are less likely to hold back growth.

 

 

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