India to widen chip sops as nearly $10 bn is fully committed, says Meity’s Krishnan
“India does not need only chip fabs (fabrication plants) and testing plants, but also equipment suppliers, material suppliers, gases and chemicals are all areas that were not covered under ISM’s (the semiconductor mission’s) first plan, and need attention,” said S. Krishnan, secretary in the ministry of electronics and information technology (Meity).
“These areas were previously covered under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (Specs), which completed its tenure,” he toldMintin an interview. “Now, a part of this has been replaced by the electronics component manufacturing scheme (ECMS), which very specifically focuses on electronics components. The semiconductor part of it is what will now come under ISM 2.0.”
The plan comes ahead of the fourth Centre-backed Semicon India, an annual semiconductor event at which India will likely seek more partnerships with global chip supply-chain vendors. Krishnan said that “since the goal is tofocus on building a resilient ecosystem, it is important to encourage the overall supply chain”.
Krishnan, who is in charge of the semiconductor incentives programme, said the Centre was looking at a way to focus on areas that were not in the spotlight through ISM’s first tenure. ISM was approved by the Centre in December 2021, with a $10 billion outlay over six years. Krishnan said at a press conference late on Friday that the scheme has utilized nearly all of its budget, with just over 2% remaining.
Out of the $10 billion (around ₹76,000 crore when the scheme was approved), ₹65,000 crore was allocated for semiconductor fabrication. Of this, the government has so far committed ₹63,000 crore towards 10 projects and is looking to fund a few small projects with the remaining funds, Krishnan said. The government kept ₹10,000 crore for the revamp of Semi-Conductor Laboratory (SCL), Mohali and ₹1,000 crore for the design-linked incentives, approving 23 projects under the scheme so far.
Krishnan said that as part of the revamp under the design-linked incentive scheme, the government is also examining how quickly the funds can be made available for the companies.
The first chip will be rolled out this year, Krishnan said.
For funds under India Semiconductor Mission 2.0, the government is in talks with the finance ministry, Krishnan said.
“With ISM 2.0, we’re also looking to revamp our design-linked incentive scheme, for which we’re looking at a number of suggestions,” said Krishnan. “There’s been a request from the industry to give it wider coverage—to make more risk capital available. These issues are being addressed as part of our revamp of the scheme.”
Ashok Chandak, president of India Electronics and Semiconductor Association (Iesa), said the core ask of the semiconductor industry is to incentivize the entire ecosystem, so that “we can support the full production locally”.
“The need of the hour is operational efficiencies, and at the upcoming Semicon 2025, we will have representation of all parts of the global semiconductor supply chain,” he said. “Pushing for developing strategic parts of the chip ecosystem will now be crucial to take our industry to the next step.”
Krishnan, a 1989 batch officer of the Indian Administrative Services, took charge at Meity in September 2023. He also oversees India’s top initiatives for electronics and technology—including the $2.7 billion ECMS, a $1.2-billion AI Mission, and ongoing initiatives such as production-linked incentives (PLIs) for mobiles.
Krishnan, who has served as the chief executive of Tamil Nadu Infrastructure Development Board, was responsible for developing the southern state into an early hub for electronics manufacturing and drawing investment from Taiwan’s Foxconn, among others.
Amid preparations for the next tranche of semiconductor investments, conversations around the Centre’s blanket ban on online money games persisted through the week. On Friday, Rashtrapati Bhavan confirmed that the Promotion and Regulation of Online Gaming Bill, 2025 had received the President’s assent.
Krishnan told Mint that the law does not target any individual entity. “We’re saying that categories that are permitted will be promoted—only one of the three categories is problematic, and needs to be stopped. There will be a requirement for a small set of rules to enforce the oversight committee and other such details, which will also be done at the earliest.”
The official also added that the long-pending Digital Personal Data Protection Act, 2025 is likely to be enforced “much earlier than the end of this calendar year”.
“There aren’t many changes, and alterations are limited and not very major. We are consulting other ministries, and should be able to put it out quickly,” he said. “A lot of energy went into clarifying the rules, which sorted out many issues associated with the DPDP Act. Beyond that, there were some genuine issues where some minor changes, some language tweaks and some clarity were required. All of that has been completed now.”
