New PLI scheme for IT server, IP designed in India to get a chance globally

Published
11th Jan, 2023

Context

Virtually addressing the VLSI Design Conference 2023 being held in Hyderabad this week, govt has launched Future Design Programme, which invests USD 200 million in start-ups that will design or co-design IP, tools or devices for the next generation of applications in India.

Very-large-scale integration (VLSI) is the process of creating integrated circuits by putting together thousands of transistors into a single semiconductor microchip.

Details of the initiative:

India will soon be launching a production-linked incentive (PLI) scheme for IT server and hardware manufacturing with one of its facets being to encourage the use of IP generated in the country.
The PLI scheme will create additional incentives for manufacturers or OEMs that incorporate IP designs in India into their systems and products.
The Centre is also focused on Digital India RISC-V (DIR-V) programme for next-generation microprocessors to achieve commercial silicon and design wins.
Objectives:
India is pursuing a vision of emerging as a semiconductor hub that while being relevant for the country will contribute significantly to the global innovation ecosystem.
Semiconductor manufacturing will address technological challenges at higher levels of abstraction in CMOS-based designs.

CMOS stands for "Complementary Metal Oxide Semiconductor", which is a technology used to produce integrated circuits. CMOS circuits are found in several types of electronic components, including microprocessors and batteries.

A number of initiatives have been unveiled in this direction, including the India Semiconductor Mission as part of which the government of India has set aside $10billion to invest, foster and catalyse the semiconductor innovation ecosystem in India.
The scheme will offer additional incentives for manufacturers that incorporate Indian-designed intellectual property rights into their products.

About the Production linked Incentives scheme:

Production Linked Incentive or PLI scheme is a scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.
The scheme invites foreign companies to set up units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units and also to generate more employment and cut down the country’s reliance on imports from other countries.
It was launched in April 2020, for the Large Scale Electronics Manufacturing sector, but later towards the end of 2020 was introduced for 10 other sectors.

PLI scheme for Mobile:

A total of 32 beneficiaries had been approved under the PLI Scheme for Large-Scale Electronics Manufacturing, of which 10 (five global and five domestic companies) were approved for mobile manufacturing.

This incentive disbursement, which is the first-ever for any PLI scheme among all 14 sectors, is directed towards the approved 10 mobile manufacturers.

Benefits of the PLI scheme:

A PLI scheme does not just aim to boost local production; it can also cut down on import bills.
It may also invite foreign investment into the country.
- For example; The Centre initiated a production-linked incentive scheme for drones and drone components after it liberalised its rules related to the machine.
- A scheme like this can also encourage drone manufacturing companies from other nations to invest in India or partner up with domestic companies.
PLI schemes are a cornerstone of the ‘Make in India’ campaign which wants to reduce India’s dependence on exports and transform it into a global manufacturing hub.
The schemes can also boost exports and result in a favourable balance of trade with many nations.
PLI schemes can also generate employment and enhance India’s manufacturing capabilities.