According to government estimates, the Indian semiconductor market was worth ₹1.13 trillion in 2020, and is expected to touch ₹4.73 trillion by 2026. India can become a hub for semiconductor design, engineering research & design (R&D) solutions, and electronic manufacturing services

Why semiconductors are important

• Semiconductors are critical technological components for emerging technologies viz. artificial intelligence (AI) and internet of things applications, 5G communications, cloud computing, automation, electric vehicles, with a wide coverage of applications from basic consumable electronic gadgets and automobiles to areas of strategic operations.

About PLI

• The recently launched Production Linked Incentive (PLI) scheme-which has committed nearly ₹1.97 lakh crore (USD 26 billion) over the next five years, from FY 2021–22-is a gamechanger in this regard.
• It seeks to bring size and scale to India’s manufacturing capabilities and exports in key sectors, while creating and nurturing global champions. The scheme incentivizes increasingly enhanced production for a limited number of eligible anchor entities, in the key sectors, within a limited timeframe.
• Given that the PLI scheme has pre-committed levels of investment and production, and the fact that it is timebound, it cannot be labelled as either an investment scheme or a subsidy scheme. It is different from previous such attempts due to its clear mandate of selecting only the most eligible sectors that can attract maximum investments and scale rapidly to provide the maximum returns in terms incremental production, employment generation and exports.
• Also, it specifically avoids the risk of spreading available resources thinly-a mistake that resulted in the Merchandise Exports from India Scheme (MEIS) from providing the expected boost to Indian exports.
• With a focus on building a strong manufacturing segment, the PLI scheme is designed to identify and support upcoming technologies that are indicative of the largest economic opportunities of the next few decades.

How its geopolitically and-geo-economically significant

• Of late, disruptions in its supply chains have reportedly affected over 169 industries and businesses world over.Hence, the possibilities of using it as a geopolitical tool can’t be ruled out in times to come.
• This, being a huge capital intensive business concentrated in a handful of producing nations, mostly located in East Asia, competitive politics could lead to nations denying access to the semiconductor supply chain.
• Diplomacy can also play a crucial role in semiconductor business. A global platform such as Quad can come forward to collaborate and put resources in research, technological know-how, access to critical technologies and materials logistics and other market support.
• Cooperation with consortium like ASEAN, a political and economic union of 10 member-states in Southeast Asia can further help to ameliorate the supply constraints with regard to semiconductor chips.

Challenges

• As the ICs business accounts for more than 80 per cent of the total economic value of the semiconductor market, it is high time India takes steps to create an ecosystem for attaining self-reliance.
• A typical semiconductor value chain includes strong research and development followed by design, production, assembly, testing and distribution and logistics network.
• Despite several claims of India being a strong candidate for fabless design market, several supply-side constraints such as inadequate availability of ultra-pure and clean water and clean sand used for growing wafers, uninterrupted quality electricity supplies, controlled pollution free environment, etc., inhibit its local manufacturing.

Way forward

• Connectivity and Capability-Related Measures: For India to make a presence in the specialty chip manufacturing and design business, a number of variables must come together.
• The Indian government’s immediate priority is to connect allied sectors in India in order to develop a chip manufacturing ecosystem. In addition, when government subsidies are removed, new businesses should be able to survive in the market.
• From design to manufacturing through packaging and testing, future chip production will need the development of an ecosystem. In this industry, India must also improve research and development, which is currently inadequate.
• With the support of a global major, India’s PSEs like as Bharat Electronics Ltd or Hindustan Aeronautics Ltd can be leveraged to set up a semiconductor fab foundry.
• Given India’s substantial expertise and experience, it may be better if the new mission concentrates budgetary assistance on other sections of the chip-making chain, such as design centres, testing facilities, packaging, and so on, at least for the time being.
• Given the long gestation periods and rapid technological changes, India must out-strategize on design and functionality, as the final product will be available only three to four years after work begins, by which time the current chip shortage will have been resolved and technology will have advanced even further.
• Providing management with a free hand in a joint venture where a global major has brought in technical competence, as well as long-term policy stability and appropriate incentives, might lead to success.

Strategic partnership with Taiwan, a leading global hub for semiconductor design and manufacturing, with leading producers of the semiconductor chip like Taiwan Semiconductor Manufacturing Co., which caters to the needs of Apple, Intel, AMD, Nvidia and other conglomerates, can be a good beginning in this direction. Similarly, any collaboration with neighbouring countries such as Bangladesh, a champion of competitive manufacturing, can open doors of opportunities for low-cost manufacturing

https://indianexpress.com/article/explained/india-draft-medical-devices-policy-explained-7820757/

How to structure

1) Give an intro about the policy

2) Explain the features of the policy

3) Analyse how this policy is significant and explain how it supports various stakeholders

4) Suggest further measures

5) Conclude