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India Semiconductor Mission (ISM) — Govt Scheme for UPSC | Vaidra
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India Semiconductor Mission (ISM)

Ministry of Electronics and Information TechnologyactivetechnologyLaunched: 2021-01-01

About the Scheme

India Semiconductor Mission was launched in December 2021 with ₹76,000 crore incentive package to develop a sustainable semiconductor and display manufacturing ecosystem. In 2024: Cabinet approved 3 major projects — Tata Electronics (Dholera), Tata Semiconductor Assembly (Assam), CG Power-Renesas (Sanand). India''s first chips to roll out by 2025-26.

Target Beneficiaries: Electronics manufacturing sector; downstream component industry; 1 lakh+ direct and indirect jobs projected

Implementing Agency: India Semiconductor Mission (ISM) under the Ministry of Electronics and Information Technology (MeitY)

Official Website →

✦Key Features

  • ₹76,000 crore incentive package: 50% fiscal support for semiconductor fab; 30% for ATMP/OSAT
  • 3 major projects approved (2024): Tata Electronics Dholera fab (28nm), Tata Semiconductor Assembly Assam, CG Power-Renesas Sanand
  • India''s first indigenous semiconductor chips expected by 2025-26
  • Special incentives for Compound Semiconductors, Silicon Photonics, SiC power devices
  • Design Linked Incentive (DLI) scheme: incentivizes IC design startups
  • MoU with US, EU, Japan, South Korea for semiconductor supply chain cooperation
  • Targets 1 lakh+ jobs; reduction of $200 billion annual electronics import dependency

✓Eligibility Criteria

  • Companies/consortia proposing to set up semiconductor fabrication facilities in India.
  • Companies/consortia proposing to set up display fabrication facilities in India.
  • Companies engaged in compound semiconductors, silicon photonics, and sensor fabs.
  • Indian companies and startups involved in semiconductor design and IP development.
  • Entities meeting specific technical, financial, and operational criteria as defined by the ISM.

★Benefits

  • Reduced reliance on imports for critical electronic components, enhancing 'Atmanirbhar Bharat'.
  • Creation of high-tech employment opportunities across manufacturing, design, and R&D sectors.
  • Stimulation of economic growth and attraction of significant foreign direct investment (FDI).
  • Strengthening India's position in global technology supply chains and national security.
  • Development of a vibrant domestic electronics manufacturing ecosystem and innovation hub.

▶Application Process

  • Submission of detailed applications and proposals to the India Semiconductor Mission (ISM) portal.
  • Thorough evaluation of proposals by a high-level committee of experts.
  • Technical and financial due diligence of the applicant entities.
  • Approval of eligible projects and signing of Memorandum of Understanding (MoU).
  • Disbursement of incentives linked to achieving pre-defined project milestones and performance indicators.
  • Ongoing monitoring and review of project progress by the ISM.

₹ Budget Allocation

76000

Funding Ratio (Centre:State): Up to 50% of Project Cost (Central Government) + State Government Incentives (varies by state)

Exam Relevance

GS Paper: GS3

Prelims Relevance9%
Mains Relevance9%

Syllabus Tags

TechnologySemiconductorsManufacturingAtmanirbhar BharatGS3

Historical Context

Launched in Dec 2021 with a ₹76,000 crore outlay. It represents India's third major attempt at establishing a semiconductor base since the 1980s.

Exclusion Criteria

  • Companies that do not meet the minimum investment threshold
  • Technologies that do not meet the 'node size' requirements specified in the guidelines

Sub-Schemes

Scheme for setting up of Semiconductor Fabs

Financial support for setting up Silicon-based Semiconductor Fabs.

Scheme for setting up of Display Fabs

Incentives for global/domestic companies to setup Display units.

Design Linked Incentive (DLI) Scheme

Support for chip design, productization, and deployment.

Challenges

  • Lack of an existing local supply chain for raw materials (gases, chemicals)
  • High water consumption (millions of gallons per day for a single Fab)
  • Requirement of 24/7 stable power with zero voltage fluctuation
  • Extreme shortage of 'Fab-ready' talent despite a strong chip design pool

Reforms & Recommendations

  • Establishment of 'Semiconductor Parks' with pre-cleared environmental permits
  • Specialized 'Semiconductor Engineering' curriculum in IITs/NITs
  • Creation of a Sovereign Fund specifically for chip-tech acquisitions

Performance Statistics

Metric

₹76,000 Crore

Source: MeitY/PIB

Metric

4 Units (cumulative)

Source: Cabinet Briefing

Critical Analysis

ISM is a strategic necessity for India's technological sovereignty (Atmanirbhar Bharat). By providing fiscal support for Fabs and Design, India aims to de-risk its supply chain from geopolitical volatilities. However, the semiconductor industry is highly capital-intensive and requires a steady supply of ultra-pure water and uninterrupted power—two major infrastructure challenges in India. The competition from established players like Taiwan and South Korea, coupled with a long gestation period, makes the mission's success contingent on long-term policy stability.

SDG Linkages

SDG 9 (Industry, Innovation and Infrastructure)SDG 8 (Decent Work and Economic Growth)

Constitutional Backing

Article 39(b) (Ownership and control of material resources to serve the common good)

Technology Used

PhotolithographyEpitaxyVLSI DesignCleanroom Infrastructure

Success Stories

Dholera Semiconductor Hub

Key Takeaways

  • Fiscal support of 50% for Silicon-based Fabs
  • Incentives for Display Fabs and Compound Semiconductors
  • Design Linked Incentive (DLI) for domestic startups
  • Autonomous business division within Digital India Corporation

Probable Questions

Can the India Semiconductor Mission reduce India's import dependency and help achieve strategic autonomy in electronics? Discuss.

HardVery High

Mains Answer Fodder

ISM is a centerpiece of GS3 Economy and Tech. Mention it for: 1. Global Value Chain (GVC) integration. 2. Critical and Emerging Technologies (iCET). 3. Shift from 'Service-led' to 'High-tech Manufacturing' economy. 4. Electronics System Design and Manufacturing (ESDM).

Convergence Schemes

  • PLI for Electronics
  • SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors)
  • EMC 2.0 (Electronics Manufacturing Clusters)

Sector Tags

TechnologyManufacturingEconomy