80% funds allocated for semiconductor manufacturing scheme remain unused

Indian government earmarked $10 billion, to boost semiconductor production through the production-linked incentive (PLI) scheme. However, about $8 billion, remains unused. Rajesh Singh, Secretary, Department for Promotion of Industry and Internal Trade and said that the department is encouraging Korean investors, who have already invested $5.6 billion in India since April 2000, to take advantage of this opportunity.

Semiconductor manufacturing scheme

PLI Scheme for Large Scale Electronics Manufacturing aims to enhance domestic production and attract investments by offering incentives. This initiative targets mobile phone manufacturing and specified electronic components, fostering growth in Assembly, Testing, Marking, and Packaging units. Companies receive a 4-6% incentive on incremental sales for five years.

Singh highlighted the government’s efforts to strengthen the manufacturing base, especially in the Semiconductor Mission, where over $10 billion is provided as an incentive to attract semiconductor manufacturers to set up operations in India. He said that there are considerable opportunities for Korean companies, as a substantial portion of the allocated funds for semiconductor production remains untapped.

In addition to semiconductor manufacturing, Singh pointed out upcoming opportunities for investments in battery storage solutions. The Indian government is opening bids for over 20 gigawatt hours of storage and mobility battery capacity, presenting another avenue for Korean companies to explore.

Singh expressed the ambition for India and Korea to boost bilateral trade to $50 billion by 2030 and acknowledged the suggestion to enhance the Comprehensive Economic Partnership Agreement (CEPA) to further strengthen the economic relationship between the two countries. This information was shared at the India-Korea Business Partnership Forum hosted by the Confederation of Indian Industry and the Korea International Trade Association.