India's Semiconductor Mission 2.0 Prep Underway, Says MeitY Official

Speaking to ANI on the sidelines of the Altos AI server launch program in Delhi, Pal stated, "Honourable FM has already announced the launch of the India Semiconductor Mission 2.0 in this budget. The process for preparation of the scheme is already on. It would be premature for me to say anything on the budget and the timeline at the moment."

Addressing India's long-standing reliance on imported silicon, Pal highlighted the progress made under the first phase of the mission. He noted that ISM 1.0 resulted in ten major projects, ranging from silicon chips to silicon carbide and gallium nitride.

While Pal declined to provide a specific timeline or percentage for reducing imports, he asserted that the mission will provide necessary traction. "With the government's sustained support to semiconductor manufacturing, the country will definitely become more resilient and more self-dependent when it comes to acquiring the silicon capability or chips capability," he said.

Pal highlighted the adequacy of current policy interventions, such as the PLI for large-scale electronic manufacturing and the electronic component manufacturing scheme, which recently saw its outlay increased to Rs 40,000 crore.

He described the current environment as a "very comprehensive policy in place" that should be sufficient to support the industry's growth. However, he maintained that the ministry remains flexible, stating that the space is evolving and the policy will continue to "evolve to meet the challenges."

While the mission marks a significant escalation in India's chip-making ambitions, the government remains focused on establishing a domestic manufacturing base for AI servers to bolster the nation's digital economy.

The Joint Secretary emphasized that the push for localized hardware is a pillar of the broader national strategy. He noted that domestic AI server manufacturing is "very essential and is at the very core of the AI manufacturing strategy."

According to Pal, these servers act as "the essential elements for data centers and they are actually the critical infrastructures which is going to drive any nation's economy going forward."

He pointed to the recent Indian partnerships that are shaping the local manufacture of AI servers, expressing confidence that more such collaborations will emerge to drive the sector.

Regarding the eligibility of AI hardware for existing government incentives, Pal clarified that servers are already categorized under the Production Linked Incentive (PLI) scheme for IT hardware. He mentioned that since these units are servers, "there should not be any doubt" regarding their inclusion.

However, he acknowledged that the specialized requirements of high-end AI hardware might necessitate further review. "AI server, given its different nature as compared to larger AI server, I think we need to examine this," he added.

- ANI