ICEA Calls for ₹10K Crore Outlay for Chip Manufacturing

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ICEA seeks the expansion of the current scheme which is set to end in March 2023, to five years.

The Indian Cellular and Electronics Association (ICEA) has petitioned the government to increase the expenditure for the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) to at least ₹10,000 crores for five years, from the current outlay of ₹3,000 crores for three years, in the Union Budget for 2023–24.

As per recent reports, the ICEA submitted its recommendations to the government arguing that the sunset period of SPECS would be in March 2023, implying that the industry would not be able to take the benefits beyond this time.

SPECS was launched in 2020 to provide a financial incentive of 25% on capital expenditure for manufacturing electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods that comprise the downstream value chain of electronic products, on a reimbursement basis. The capital expenditure includes the expenditure in the plant, machinery, equipment, associated utilities and technology, including Research & Development (R&D).

In a written reply to the Lok Sabha on Wednesday, minister of electronics and information technology (MeitY), Ashwini Vaishnav, stated that the government has approved 32 applications with a total project expenditure of ₹11,130 crore and committed incentives of ₹1,519 crores. He mentioned that the employment generation potential of the approved applications stood at 32,457.

It should be noted that the incentives under the scheme will be available for an investment made within 5 years from the date of acknowledgement of application.

ICEA’s petition comes at a time when countries such as the US and China are aggressively building their semiconductor manufacturing industries. The US has allocated $52.7 billion as an incentive for promoting domestic semiconductor production and research while China is reportedly working on building an incentive package amid the current geopolitical tensions.



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