India Electronics & Semiconductor Association pushes for ISM 2.0 to sustain growth momentum – CNBC TV18
According to Chandak, the first phase of ISM, which saw an allocation of ₹76,000 crore (approximately $10 billion), has been nearly exhausted due to the rapid approval of large-scale projects. Chandak pointed out that five key projects worth ₹1.5 lakh crore have already been greenlit, with further proposals on the horizon. Projects in Maharashtra and Odisha are among the latest to receive government approval.
“Considering the global demand and continued momentum, ISM 2.0 is almost inevitable,” Chandak stated.
Chandak further elaborated on the burgeoning interest in India’s semiconductor sector, particularly in light of the upcoming Semicon India Conference. The event, which will see participation from over 500 domestic and global companies and more than 100 global executives, including 75 CXOs from major international firms, reflects the growing global attention on India’s semiconductor ecosystem. According to Chandak, the Indian electronics market, valued at $140 billion today, is expected to grow to $500 billion by 2030, with semiconductor demand rising from $40 billion to over $100 billion within the same period.
This surge in demand, both domestically and globally, has created an urgent need for additional funding, Chandak stated.
Below is the verbatim transcript of the interview.
Q: Is it time for Indian Semiconductor Mission 2.0?
Chandak: I think Indian Semiconductor Mission (ISM) 2.0 will be in progress because the ISM 1 was highly successful. There are five key projects of Rs 1.5 lakh crore already approved by the Ministry of Electronics and IT, and there are more proposals on the table.
In fact, last week itself we have another project that was approved by the government of Maharashtra, two projects there. There is one in Odisha. So there is a lot of appetite. And considering that, the first allocation of ₹76,000 crore or roughly $10 billion by ISM-1.0 is, I would call, almost allocated or exhausted. But with the momentum which is continued and the global demand that’s going to unfold, definitely there is a much wider scope and expectation of ISM 2.0. Now, when it happens is a matter of time, but I’m sure it is going to happen, because this is really a major industry, mega projects, and it’s getting into a momentum.
Q: How soon do you hope that the second round of funding for the semiconductor mission is announced and how big should that be?
Chandak: Considering the first tranche where our ecosystem was not fully ready and there were a lot of concerns, hiccups and questions. The government has to also put up a large amount of incentive mechanism both at a central level as well as at the state government level. Now things have progressed and this week’s Semicon India event we see a huge turnout of not only the domestic Indian companies but also global counterparts.
There are almost 75 CXOs of global companies joining the event, more than 100 global guys, 500 exhibitors, huge interest there and why? The Indian electronics market, which is about $140 billion as per the IESA market research report, is expected to grow to $500 billion and corresponding the demand for semiconductors will grow from $40 billion to about $100 billion plus by 2030. We see a huge India opportunity, and on the second side, it’s globalisation which is happening, and particularly our semiconductor industry is a global business. Any chip manufacturing designed for manufacturing touches about five to seven countries actually And this is where India would see a huge demand not only from local domestic market but also from the global market. And that is where we would see this additional allocation would be required. It’s a matter of time whether it’s weeks or months, very difficult to pronounce for me but it is going to happen very soon.
Q: When it comes to electronic components, the industry has been feeling for some time that we need higher value addition and technology collaboration in electronics, especially when it comes to the semiconductor industry. How can we make some of the PLI schemes or any other scheme more focused on value addition in electronics?
Chandak: Recently there was also a discussion with the NITI Aayog, as well as with the Ministry of Electronics and IT, where as an industry body, along with several members, we identified several high-priority products for the country. And within that high-priority products, the high-priority chips are required, considering the next five years of the demand. And those recommendation topics are there on the table, actually.
What we are proposing is a PLI, the Design Linked Incentive (DLI) scheme, the various state-level ESDM policies, everything if we holistically link to these particular high-impact chips and high-impact electronic products, we can see a very, very immediate transition to the value-addition activity. And that is what is a work in progress right now on the chip side.
Also, on the electronic component side, we did make some recommendations, and the government, particularly the Ministry of Electronics, IT and ISM, play a very, very crucial role. They are looking into this, because electronic components constitute almost 20% of the bill of material, and that is without semiconductor I am referring the capacitor, the resistors, the PCBs, the connectors, and so forth. And here as well, there is a huge scope for value addition because today most of the manufacturing is imported and also there is a lot of kits import actually. So there are recommendations on the table. The PLI would come up. My understanding is the PLI would happen for components, particularly non-semiconductor. And for semiconductor, there is a PLI and DLI, which is already there. In fact, design linked incentive is also progressing pretty well. There are 13 startups which have been chosen and government as well as industry body as IESA, we have taken a goal that we need to move to at least 100 startups which should get the DLI benefit.
