The government is formulating a scheme to incentivize investments to set up hyper-scale data centers in India and boost the capacity of the existing data center ecosystem, besides working on new segments like drones and robotics to develop their manufacturing ecosystem in India, a top official said.
“We have prepared a scheme or policy on hyper-scale data centers, and also a scheme for incentivizing investments in hyperscale data centers here in India. The current scale of hyper-scale data centers in India compared in terms of power consumed is 200 MegaWatts and our effort will be to come out with a policy and scheme that aims for a tenfold growth in this, in a very short time,” Ajay Prakash Sawhney, Secretary – Ministry of Electronics & Information Technology (MeitY), said in a virtual session.
In November last year, Meity had released the draft data center policy which proposed to designate data centers as infrastructure and to group centers under the essential services category among other measures.
Sawhney added that the department is currently working on a production-linked incentive scheme for wearables and hearables, besides new segments like drones and robotics.
We have started work also on drones and robotics and these are the new segments that will soon get added to the different areas that we are incentivizing,” Sawhney said.
“Separately there are schemes for batteries that come from Niti Aayog, but we are also supporting it in many ways, both in terms of R&D and some allied activities and materials.”
The secretary said that despite the second wave of Covid-19 pandemic hitting the industry, the government maintains an optimistic outlook on the growth of the electronics manufacturing sector.
Our expectation is that we should be able to grow at a higher pace than 25%, “which is quite an ambitious target because to plan to grow at 25% plus year-on-year is a very steep target for any geography,” he said.
“For this, we need to get many things right. We need to get the incentive structures right, we need to be able to compensate for some of the disabilities, which are reducing over time but we still have certain disabilities, compared to the competing geographies, especially those that we are focused on. We need to also get more and more component manufacturers into our system, complete the supply chain so that our dependence on stretched supply chains is reduced significantly,” Sawhney said.
He also pointed at the initiatives taken by the government to build supply chains from scratch. MeitY had recently invited expressions of interest from companies to set up semiconductor foundries and display FABs in India. The deadline for those submissions is April 30th.
“Instead of creating a scheme entirely on our own, we have opted to reach out to the market to understand what kinds of interest is there, what is it that the market expects from the government, from central government, and from the state governments, so that we can formulate a scheme, which is able to bring the desired outcome,” Sawhney said.
He added that although foundries account for only 20% of the chips used in electronics while integrated device manufacturers (IDMs) account for the rest 80%, there is still room for at least three FABs with the capacity of 30,000-40,000, 12-inch wafers per month to set shop in India.
He highlighted the burgeoning opportunity for newcomers in the manufacturing space to focus on new-age electronics products with increased adoption of digitization across sectors like payments, online commerce, healthcare, logistics, and agriculture.
“Each of these platforms will end up creating massive demand for things digital, and anything digital again requires calls for a lot of electronics,” he said.
