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India expects at least a dozen semiconductor manufacturers to start setting up local factories in the next 2-3 years after the South Asian nation offered incentives for the sector, the country’s information and technology minister told Bloomberg on Wednesday.

Prime Minister Narendra Modi’s government is working on developing an entire ecosystem for the chip manufacturing industry and will start taking applications under the incentive schemes from Jan.1, 2022, Ashwini Vaishnaw, who also holds the railways and telecom portfolio, told Bloomberg Television’s Haslinda Amin and Rishaad Salamat.

“The response has been very good. All the big players are in talks with Indian partners and many want to come directly to set up their units here. Almost all big ones are talking to us," Vaishnaw said.

Last week, the Indian government approved a 76,000-crore scheme to boost semiconductor and display manufacturing in the country in an bid to position India as a global hub for hi-tech production, and attract large chip makers.

The move is aimed to further India's ambitions to be self-reliant in electronics manufacturing, bring massive investments and result in 35,000 specialised jobs apart from indirect employment for one lakh people.

In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure.

The semiconductor scheme also comes at a time when the world is witnessing a severe crunch of semiconductors, a key component used in cars to electronic devices. The supply has been disrupted as a result of the COVID-19 pandemic, which forced many production centres to close intermittently.

The government has already notified the plan and expects compound semiconductor units and design and packaging companies to get approval within the next 3-4 months, Vaishnaw said.

“In next 2-3 years time frame, we see at least 10-12 semiconductors going into production, we see display fab going into production or may be finalizing completion," the minister, who has an MBA from the Wharton School of the University of Pennsylvania and attended the Indian Institute of Technology, said. “At least 50-60 designing companies would have started designing the products in the next 2-3 years".

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