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India’s display fab subsidy

  • Published
    25th Nov, 2023
Context:

India’s ambition to establish itself as a global electronics manufacturing hub is underpinned by the Electronics System Design and Manufacturing (ESDM) policy, which has an outlay of Rs 76,000 crore ($10 billion).

About ESDM Policy and Display Fab Scheme:

  • Strategic Investment in Electronics: India's vision as a global electronics manufacturing hub is supported by the Electronics System Design and Manufacturing (ESDM) policy, with a substantial outlay of Rs 76,000 crore.
    • The focus extends beyond semiconductors to include the less-discussed but equally critical display fab scheme.
  • Essential Role of Electronics Industry: The electronics sector is integral to India's economic and strategic growth, permeating all segments. With the global Electronics Manufacturing Services (EMS) market projected to reach $1,145 billion by 2026.
    • India aims to leverage emerging technologies, fostering innovation and capturing a significant market share.
  • Display Fab Scheme's Untapped Potential: While attention often centers on semiconductors, the display fab scheme holds immense promise.
    • Acknowledging India's status as the largest importer of Liquid Crystal Displays (LCDs), the scheme provides a unique opportunity to reduce dependence, achieve self-reliance, and play a pivotal role in the global electronics market.

India's Display Market Potential and Policy Support

  • The global display market, set to reach $187.8 billion by 2028, presents a lucrative opportunity. India's display market, expected to triple in size by 2030, requires 10-12 fabrication units.
  • LCDs, dominating the market, are poised for sustained growth despite emerging technologies like OLED.
  • To position India as a global display manufacturing hub, the Modified Display Fab policy offers compelling incentives.
  • These include capital subsidies, tax reimbursements, interest subvention, fostering a conducive environment for investments, and reducing reliance on imported displays.
  • Vedanta Group and Elest (backed by Rajesh Exports) are early players, with Vedanta partnering with Innolux for a fabrication unit in Gujarat.
  • The removal of the subsidy cap and government invitations for the Modified Display Fab Scheme have intensified industry interest, indicating a potential surge in participation.

India's Strategic Opportunity and Economic Transformation

  • Strategic Importance of Display Subsidy: India stands at a critical juncture, mirroring South Korea's success in display glass fabrication.
    • The display subsidy has the potential to revolutionize India's economic landscape, decrease electronics manufacturing costs, reduce import dependencies, foster innovation, and create significant employment opportunities.
  • Replicating South Korea's Success: South Korea's investment in display glass fabrication catapulted it to global prominence, driving economic renaissance.
    • India's strategic focus on display technology, with supportive policies, holds the key to becoming Aatmanirbhar in electronics manufacturing and a hub for electronics exports.
  • Trajectory of India's Electronics Industry: Localizing system design, strategic investments in display technology, and the implementation of supportive policies are pivotal.
    • These steps not only ensure self-reliance but also position India as a formidable player in the global electronics market, driving economic transformation.
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