An expansion of the production-linked incentive (PLI) scheme, particularly a higher allocation for the sops, tops the wish list of chip makers from Finance Minister Nirmala Sitharaman in her Union Budget for 2025-26.

Stakeholders across the semiconductor industry aren’t alone, the entire manufacturing industry is awaiting some major announcements on February 1, as the government goes full throttle on ‘Make in India’.

Semiconductor manufacturing has been a major focus of the government in the recent past, especially in terms of the volume budgetary allocation, but industry leaders believe that the design ecosystem needs more monetary support to sustain.

Industry experts believe that for the country’s semiconductor industry to step up in its game, higher budgetary allocation and lower import and GST levies are essential.

“Measures like lower GST on indigenously manufactured components, reduced import duties on semiconductor-grade inputs, and zero to low interest funding for domestic companies can catalyse growth for home-grown semiconductor manufacturers,” said Hareesh Chandrasekar, cofounder and chief executive of AGNIT Semiconductors.

Heightened Focus On Manufacturing

The India Electronics and Semiconductor Association (IESA) has submitted to the finance ministry a recommendation for extending the PLI scheme beyond the current allocation of INR 76,000 Cr (about $10 Bn) with an additional provision of $20 Bn for the next five years.

It said the Semicon India Programme and the India Semiconductor Mission (ISM) have delivered significantly to the country’s GDP growth, job creation, foreign investments, industrial self-reliance, and helped bolster India’s position in the global chip market. The proposed allocation of $20 Bn in the Budget will propel the next phase of growth, innovations, and Atmanirbhar Bharat with a global impact, IESA said.

The government had in 2021 set aside $10 Bn........

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