Budget 2024 expectations: Tailored funding and tax incentive packages for semiconductors, electronics product assembly and more – Business Today
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With the Interim Budget 2024 set to be presented on February 1, electronic chip players are abuzz with expectations. Given India’s focus on becoming a semiconductor manufacturing hub, the Budget is being closely watched keenly not just in India but probably extensively across the globe as well.
“Some measures that can be considered are tax incentives and multi-year support for hiring and retaining specialised talent in semiconductors and electronics manufacturing; incentives on technology licensing fees; and incentives on the import of equipment,” says Danish Faruqui, CEO, Fab Economics.
In addition, he adds, the industry is hoping for lower GST not only on electronics but also on sub-components to encourage their manufacture and assembly. Tax incentives not only for start-ups but also for angel investors and VC’s to turbocharge the Indian tech ecosystem; R&D funding; and tax incentives not only for academia-driven R&D but also for electronics manufacturing players so they can develop the next generation of technology in India, as currently India’s tech roadmap is driven by manufacturing and assembly technology licensing from global players; R&D funding; and tax incentives for datacenter infrastructure (DCI) in India.
India needs focused and tailored funding and tax incentive packages for each area, including semiconductors, electronics product assembly, component manufacturing, specialty chemicals and materials manufacturing, battery cell manufacturing, AI hardware and software development, datacenter infrastructure, cyber security, and 5G hardware and infrastructure. “India’s competition is different in each of these segments; hence, tailored funding and tax incentive packages are the need of the hour. This will allow India to compete globally in each sector as a destination of choice via individual knobs to address competition in each segment differently. Granular funding and tax incentive package development in India, which is informed by competition across alternative world regions for each segment, is key to winning the tech game at the national level,” adds Faruqui.
India’s Union budget 2024 will set the tone and pace for the execution of the semiconductor manufacturing and electronics product manufacturing roadmap of India that India has been positioning and planning for the last 4 years or so based on various PLI schemes, including a $10 billion subsidy allocation for semiconductor manufacturing and packaging alone.
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