India Finance News

Israel keen to support growth of Indian semi-conductor industry

With a growing demand in electronics and manufacturing in India and limited domestic manufacturing, semiconductor chips will soon become a significant import item for India.

A local semiconductor manufacturing industry can support the development and manufacturing of sensors required for India specific Internet of Things (IoT) products, especially in the domains of agriculture, healthcare, smart cities, safety and waste management. The report estimates establishing such an industry would witness a pay back of 6.3X in terms of economic impact; 4X in employment and help develop a high-tech ecosystem in the country.

An Indian semiconductor fabrication facility can offset semiconductor imports of US$ 8 billion over the projection period and have a further multiplier impact of US$ 15 billion on the Indian economy. An Indian semiconductor fabrication facility would enable India to join a handful of nations with such capacity.

This was among key items on the agenda of Indo-Israeli forum held in Tel Aviv last week. In fact Ambassador Ron Malka, Ambassador of Israel to India, and Ambassador Sanjeev Singla, Ambassador of India to Israel, officially released a report on “Feasibility Study of Semiconductor Fabrication Facility in India” during the 12th India Israel Forum in Tel Aviv.

Noting the importance of self-reliance and security implications of the semiconductor fabrication industry, the forum proposes the government should consider providing support to build the semiconductor fabrication industry in the form of 1) US $912 million capex subsidy for new equipment, refurbished equipment (up to 50%) of total plant and machinery cost; technology license fees and R&D cost (up to 50% of total project cost); and 2) US$ 1,089 million of interest free loan released in proportion to equity. The report aims to provide general information and direction on the potential and feasibility of setting up a semiconductor fabrication facility in India. The report was produced by a core group, set up under the 11th India Israel Forum, consisting members from both India and Israel.

The Forum, now in its twelfth year, is an annual gathering promoted by the Ananta Aspen Centre, Tel Aviv University and Confederation Indian Industry (CII). The Forum provides a platform for developing bilateral relations. The Forum is chaired by Aharon Fogel, Chairman, ZIM Integrated Shipping Services Ltd and Stanley Bergman, CEO and Chairman, Henry Schein on the Israeli side.

On the Indian side, the Forum is led by Jamshyd N. Godrej, Chairman of the Board, Godrej and Boyce Manufacturing Company Ltd and Nikhil Sawhney, Vice Chairman and Managing Director of Triveni Turbine Limited and Director, Triveni Engineering and Industries Limited and GE Triveni.

Source: Economic Times

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