Semiconductor Sector Awaits Higher Allocation in Interim Budget 2024
Scheduled for February 1, 2024, the interim budget for India is on the horizon, while the full budget for the fiscal year 2024-2025 is anticipated post the general elections in June, following the establishment of a new government. In the previous Union Budget (2023-2024), Rs 3,000 crore was allocated to propel India's semiconductor ecosystem, highlighting a focus on the growth of semiconductors and display manufacturing. The semiconductor industry is now rife with speculation as industry leaders engage in discussions, driven by a dearth of detailed information regarding forthcoming developments.
Shashwath T R, Mindgrove Technologies' Co-Founder and CEO, commended the increasing initiatives, such as the design-linked incentive (DLI) and production-linked incentive (PLI) schemes, as instrumental in propelling India's status as a semiconductor powerhouse. He suggested that the government should consider elevating the DLI scheme from USD 200 million to a more substantial amount. Additionally, T R emphasized the potential to encourage more participants in the ecosystem by raising the reimbursement limit for startups from Rs 15 crore.
Echoing this sentiment, Sanjay Gupta, Chairperson of IESA, stressed the importance of directing risk capital toward deserving startups in the semiconductor sector. Gupta proposed achieving this through strategic partnerships with venture capitalists (VCs) or direct government support, facilitating the accelerated progress of semiconductor startups in India to establish a robust global presence.
With the Indian semiconductor industry projected to reach USD 8.32 billion by 2024, focusing on integrated circuits, expectations are high for the upcoming union budget. Prithvideep Singh, General Manager at Continental Device India (CDIL Semiconductor), emphasized high expectations for the swift rollout of SPECS 2.0 and an expansion of the budget allocated to the India Semiconductor Mission.
While supporting an equitable allocation of funds, Singh highlighted concerns about the risk of depleting funds at the current pace, potentially excluding crucial MSMEs from participating in the semi- ecosystem's development. Adding to the optimism, Sanjay Saha, India Country Manager at Synaptics, expressed confidence in the government introducing revolutionary initiatives that enhance technology utilization and stimulate growth in semiconductors, fabless design, and the electronics startup ecosystem.