<\/p>\n
The scheme, which will run over several years, will support companies across 30 semiconductor and 30 electronics categories, the people cited above said on the condition of anonymity. The incentives will be given based on value of capital investments (capex) as well as turnover of companies.<\/p>\n
The idea is to create an ecosystem that encourages tech and design patents, which will not just multiply industry revenue at a later point but also cushion the country against global developments that may thwart imports of key components or products.<\/p>\n
A task force of industry veterans created by the Centre last August submitted its report to the ministry of electronics and information technology (Meity) in December. The report is now being assessed by Meity officials and is expected to be submitted for cabinet approval in the coming weeks. Subject to approval, it will then be announced in the coming months.<\/p>\n
Also read <\/strong>| With electronics tariffs off, what happens to iPhone in India?<\/a><\/p>\n \u201cRight now, despite being under global pressure, the US has the likes of Apple, Nvidia and all the other technology companies in India\u2014whose biggest value are their technology reference designs and IPs,” the first official cited above said, adding that the DLI scheme is aimed at giving a boost to product design, fabless chipmakers, original design manufacturers (ODMs) and original equipment manufacturers (OEMs) in India.<\/p>\n According to this official, some products proposed to be included in the scheme are modems, wifi chips, near-field communications chips, geolocation chips, 5G radio frequency receivers, power electronics for electric vehicles (EVs), home gateway and security systems, inverters, smart meters, and industrial control systems, among others.<\/p>\n \u201cEach of these categories, through government incentives, can address up to 60% in domestic value addition (DVA) for which India is currently reliant on other countries,” the official added.<\/p>\n Read this<\/strong> | Advantage India in electronics as Donald Trump pauses tariff, hints at exemptions<\/a><\/p>\n The second official cited above said active discussions are on for incentivizing product design and IP, but did not offer a timeline for the scheme. \u201cThe government\u2019s objective is to build brands that could both serve the domestic market with various government bodies as key customers, and add to exports from India\u2019s electronics economy,” the second official said. \u201cThe idea is to keep the growth balanced, so that geopolitical turmoil does not upend the domestic electronics ecosystem by halting exports.”<\/p>\n A third senior government official said that the existing DLI scheme has not been deemed enough by industry, for which \u201cMeity is currently exploring a broader scheme to boost the making of components and technologies from India itself. We’re currently in due process of exploring the same”.<\/p>\n A previous DLI scheme launched in September 2021 under Meity\u2019s India Semiconductor Mission (ISM) offered less than $12 million in net incentives over five years, that too only to five selected companies.<\/p>\n Queries sent to Meity remained unanswered till press time.<\/p>\n Product design is prioritized by technology companies to create core patents and intellectual properties. In the US, companies like Google, Qualcomm, Intel, and Nvidia hold patents for their electronics designs that are licensed by companies around the world to be used in gadgets and enterprise technologies.<\/p>\n Also read <\/strong>| India\u2019s annual electronics exports expected to double to $50 billion by 2030<\/a><\/p>\n These patents add significant value to the domestic technology ecosystem. As per the Meity task force\u2019s report, 30-60% of a country\u2019s annual electronics industry\u2019s revenue is driven by companies that hold patents in the country.<\/p>\n \u201cIncentivizing component manufacturing is the single-most important objective that India must follow to reduce its foreign import dependency,” said Ashok Chandak, president of industry body, India Electronics and Semiconductor Association (IESA), adding that the association has submitted its observations to incentivize electronics designs in a report to both Meity and the office of the principal scientific advisor.<\/p>\n \u201cThis can create a big economic opportunity for companies within India, and future incentive schemes under Meity can offer preferential market access to Indian companies\u2014to ensure that incentives are not being sought just by importing most components and assembling them locally,” Chandak said.<\/p>\n \u201cThe idea is to incentivize companies that drive the supply chain, own product specifications, and create technology standards for an industry,” a senior industry executive said, requesting anonymity since they work closely with the government. This executive added that production-linked incentives (PLIs) for mobile phones are ending next year, which means electronics manufacturing services (EMS) firms such as Dixon Technologies, Syrma SGS and others will need to \u201cramp-up their operating margins, which remain slim even now”.<\/p>\nWhy design is important for a country<\/h2>\n