India Budget gives a big push to semiconductor, electronics manufacturing

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26 Aug, 2025 12:21

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• Outlay on semiconductor increased 130 percent
• Total PLI allocation under the MEITY also hiked
• Government support is yielding results
• Outlay hike a step in the right direction

Finance Minister Nirmala Sitharaman has increased the outlay on semiconductors & display manufacturing under the 'Modified Programmed for Development of Semiconductors and Display Manufacturing Ecosystem in India' by 130 percent to Rs 6,903 crore in the Union Budget 2024. Under this scheme, capex on land, buildings, plants, equipment, cleanrooms, transfer of technology, and R&D are covered for support for a period of over six years.

The total PLI allocation under the MEITY (Ministry of Electronics and Information Technology) has also been raised by 33 percent to Rs 6,200 crore, covering a variety of schemes in the ESDM (Electronic System Design and Manufacturing) segment. The Meity launched an IT hardware 2.0 PLI last year for which the budget allocation was raised by Rs 50 Crore to Rs 750 Crore.

India has an ambitious plan to become a major semiconductor and electronics manufacturing (ESDM) player to spur growth in the increasingly technology-dominated world.

The OSAT (Packaging, or Outsourced semiconductor assembly and test) is a crucial part of the Semiconductor supply chain and has attracted an investment of $2.75 billion from Micron Technology, which plans to set up facilities in Gujarat. Multiple Indian companies, including HCL and the Tatas, are also exploring similar opportunities.

Display manufacturing has recently seen an investment of Rs 1000 crore by Big Tech, including the JV between Corning International and Optiemus Infracom, to set up a cover glass manufacturing unit  in Tamil Nadu.

While India is still in the early phase of becoming a key player in the electronics manufacturing ecosystem, the government schemes are a step in the right direction to rapidly develop the sector.

The key beneficiaries of India's electronics manufacturing push and higher budgetary outlay include Dixon Technologies, Kaynes Technology, Syrma SGS, and Optiemus Infracom.