5. Regulatory environment related to Indian semiconductor: typical cases and related reforms
(1) Micron's experience lessons to invest in the ATP factory in India
The Meiguo ATP project can be described as "a wave of twists and turns". Indian policy makers show quite flexibility during this period, and finally realized "investment promotion".For example, the Indian government has modified the initial "Indian Semiconductor Program" for the project, increasing the proportion of funding from the central government from 35%to 50%, and expanding the scope of application to any manufacturing craft node.In addition, ISM initially stipulated the 45 -day application period, and it has been canceled, and only requires submission of applications by the end of 2024.
It is particularly noteworthy that on the "Pre -Price Price Agreement" (APA)) and related tax issues, usually multinational companies need three to four years, but Micron is expected to complete the APA within six months.Officials from the ISM, the Ministry of Finance, the Ministry of Taxation, the Central Direct Taxation Committee (CBDT) and the Indian Ministry of Electronic Information Technology (Meity) jointly worked together to contribute to the investment in India.
In June 2023, the Indian annual financial bill amended Article 65A of the Indian Tariff Law, causing concerns about the beneficiaries of the PLI plan.According to the amendment, the Indian government canceled the comprehensive goods and service tax (IGST) exemption of input products imported from tax -free bonded warehouses for export production, and plans to levy 18%IGST on such products.According to the manufacturing and other businesses in India in the Customs Bonded Warehouse (MOOWR) plan, in these "customs bonded warehouses", manufacturers can import (and storage) components for domestic production and export goods.Historically, MOOWR imported products will not generate any import taxes or other tariffs.Based on industry feedback, the Indian government announced in September 2023 that it will continue to exempt the IGST tariffs in the semiconductor and electronic manufacturing industry.
(2) The evolution of the Indian regulatory environment
In the fierce global competition, India's industrial policy has evolved from the "Red Restaurant" to a "red carpet" to attract high -value high -tech investment.In January 2021, India launched an initiative to "reduce regulatory compliance burden", instructing India's central and local governments and industry consultations to promote "decentralization service" in investment promotion.One of the results is to reduce FDI's online application form from 15 pages to 6.5 pages.
Related efforts reached its peak in July 2023. At that time, the Indian Parliament passed the Jan Vishwas Act and deleted 183 clauses of 42 legislation to make it easier for the country to carry out business in the country.In the past, even unintentional illegal acts, such as not submitting a commercial registration form, would be fined and imprisoned for one year.The Indian Ministry of Commerce is also conducting a "regulatory cost" activity to simplify some of India's task processes, such as opening or closing enterprises, obtaining the consent of business factories, obtaining power or water connections, and land registration.
In September 2021, India launched the "Single Window System" (NSWS), from 31 central departments and 28 state governments that can directly approve and license required by the enterprise through the platform.As of January 2023, more than 75,000 applications have been approved from the 1.23 million applications received. In addition, many states in India have followed the central government and have developed their own single window systems.
(3) Tax policy
India has made great progress in reforming the tax environment.In July 2017, India introduced a unified national "commodity and service tax" (GST), which greatly simplified its tax system.In 2019, the Indian government also reduced the tax rate of standard enterprise from 30%to 25%, and at the same time provided eligible enterprises with a lower 22%"selection tax".In addition, India has reduced the tax rate for newly established domestic manufacturing companies after 2019 to 15%, but companies that choose such lower corporate taxes can no longer participate in investment promotion plans such as SPECS or PLI.In 2021, India's highest corporate tax rate was 25%, lower than 30%of the Philippines, slightly higher than 24%of Malaysia, 22%of Indonesia, and 20%of Thailand and Vietnam.
India also provides 8.2%tax credits for R & D activities, but it is slightly lower than 9.5%of the United States, far lower than 16.6%of other developed countries.In the Special Economic Zone of India, it may further provide a tax reduction policy of 5-10 years.
(4) Labor policy
In the past ten years, the Indian labor market policy has undergone a lot of changes, and the situation of "layoffs still require government approval" has been significantly improved.Especially from 2019 to 2020, 29 labor legislation was merged into 4 comprehensive codes.Ensuring the single license mechanism of the industry, simplifying compliance procedures, providing operating flexibility for small and medium -sized enterprises and providing a faster dispute resolution mechanism.
At present, Indian companies have been able to adjust their labor needs according to the changes in market demand and ensure better compliance with labor law through online tools.In the past, the negative regulatory regulations based on "should do" and "should not be done" are transforming into more active inspectors and coordinator models.Although simplifying the labor laws (including minimum wages) are still challenges, the overall reform has created a relatively good competitive environment.Surat Investment
(5) Tariffs and import policies
The World Trade Organization Information Technology Agreement (ITA 1) was implemented in 1996. India is the original signing country of the agreement, and it has played a role in promoting and canceled the trade tariffs on hundreds of information and communication technology products.However, India did not participate in the 2015 expansion agreement (ITA 2), and refused to cancel a large number of import tariffs on other semiconductor products, materials and equipment.
In August 2023, the Indian government announced that it would implement a "import license" system for laptop, tablet, and personal computer imports, and immediately took effect.Due to the opposition from trade partners such as the United States, the Indian government finally amended the measure to shift to the "import management system", only requiring enterprises to register the number and value of imports and extended it until November 1.
(6) Convenience of customs and trade
India strives to improve the convenience of trade.In order to promote domestic coordination and performance of the Trade Convenience Agreement (TFA) of the WTO (TFA), India has established the National Trade Convenience Committee (NCTF), which is the chairman of the Cabinet Secretary.From May to October 2022, the average residence time of Indian containers was only 3 days, while the United States was 7 days and Germany was 10 days.With the help of a number of reforms in customs clearance of customs customs, the customs clearance time for India's port in Hong Kong has been shortened by 15-17%compared with the past year.In addition, India has also introduced a risk -based management system, which reduces the number of documents (such as declaration orders and bills of lading). It can support Hong Kong documents online and introduce a complaint correction system to improve and speed up customs clearance.
However, the WTO's suspension of electronic transmission tariffs may not be renewed, which will bring investment and business challenges.India and other countries may require companies to submit customs declarations and abide by other management requirements for "import" semiconductor design and manufacturing data, and finally pay import tariffs on such data transmission to increase the compliance burden and capital costs of semiconductor company operations.
6. The supporting situation of the Indian semiconductor industry chain
(1) labor force
As mentioned earlier, India currently has about 125,000 engineers engaged in various aspects of chip design and development.The number of employment in this category is still increasing, and the vacancy of India's semiconductor position has also increased by 7%.It is expected that by 2030, the global semiconductor industry will need to increase 1 million technology workers, and India has been ready to help meet this demand.Nearly 2.5 million students in India signed up for undergraduates for engineering, of which nearly 600,000 students chose to electronics.However, most students in engineering are focused on data science or artificial intelligence, and they are not interested in electrical engineering fields. Students of electronic majors often tend to be easier to position.
Although India has a powerful talent foundation supporting semiconductor design work, the development of manufacturing also requires a large amount of investment in other aspects.On the whole, India is committed to cultivating skilled semiconductor labor through the C2S program, involving high -quality qualified engineers of 85,000 VLSI and embedded system design majors. They will receive master's and doctoral degree training in 120 Indian academic institutions.Time makes India a "semiconductor talent country".In addition, the C2S program will also provide economic incentives for relevant large companies, startups, small and medium -sized enterprises and academic institutions to promote talent training.In fact, the lack of skilled workers is also an important challenge for the American chip bill, which may also be a key area for cooperation between the United States and India.
(2) Logistics and transportation infrastructure
In recent years, the quality of the overall logistics and infrastructure environment of India has undoubtedly improved significantly.From fiscal year to fiscal year in 2022, the construction volume of highway in India has tripled, and more than 200,000 kilometers of highways have been built, 37 kilometers per day.During the same period, the number of rails paved every day in India increased by tripled, and the number of airports doubled (from 74 to 141, and 100 were under construction), and more than 180 port projects (and 230 were 230 (and 230Multiple new projects are in preparation).However, India's logistics speed is still behind competitors. For example, 2,000 kilometers of delivery in India can be completed within 24 hours, but it takes up to 5 to 7 days in India.
(3) Power infrastructure
The semiconductor factory is up to 100 MW times per hour to ensure stable, reliable and continuous power supply.The power outage will not only disturb the operation, but also severely damage the equipment and wafers in production. Generally, the loss is about millions of dollars, and in some cases, it is even tens of millions of dollars.Unstable power supply has also been an important factor in India's previous failure to attract the failure of semiconductor manufacturing.
Today, the Indian Central Government and State have invested a lot of investment in increasing power production, development of reliable and redundant power grids, and the privatization of power distribution companies. The installed capacity has reached 410 GW (GW), ranking third in the world.At least 172 Gava is renewable energy.It is worth noting that the Indian National Semiconductor Laboratory has not been powered off since 1983.
(4) Supply chain and R & D system
Semiconductor production requires more than 150 chemicals, more than 30 gases and more than 30 minerals.Due to India's strength in other industrial fields such as automobiles, paint, pharmaceuticals, and steel, many companies with global competitiveness have already existed, including Tata Chemical Company, Pidilite Industries, and Gujarat Alkalies Limited.In fact, the Hindu chemical industry is worth $ 178 billion (expected to increase to US $ 350 billion by 2025), accounting for 7%of Indian GDP, ranking third in Asia and the sixth largest in the world.
India's chemicals and natural gas manufacturers have produced many chemicals required for semiconductor manufacturing, but they should continue to build refined capabilities to improve the purity of chemicals and use it to meet the needs of semiconductors. Related investment requires at least about 300 million to 5 to 5$ 100 million.Considering that there are difficulties in large -scale investment in advance, cooperating with major companies in the world to establish a qualification laboratory is very important for improving the quality of Indian chemicals or industrial gas.Some Indian chemical companies have made substantial progress. For example, in the face of chip production of more than 180nm, the Changdigal SCL has successfully achieved localization of 35 materials.
India's semiconductor ecosystem, especially chip research and design, has received rich support of assets.For example, the semiconductorless wafers have global competitiveness. The Indian Semiconductor Laboratory (SCL) is a research institution owned by Meity.It is used for chips that guide the purpose of the Indian Space Plan.At the Institute of Indian Sciences in Bangalol, the Nano Science and Engineering Center (CENSE) operates the National Nano -Machining Center, which is the most advanced CMOS/MEMS research facility.Meity's advanced computing development center (C-DAC) supports additional R & D work.
Seven, semiconductor development opportunities in India
Modi believes that the "competitiveness" and "cooperation" of the federal system are two sides: he hopes to let the state compete with each other, strive to create the most attractive business environment, and at the same time allow the state to work together to accelerate the development of the country.There is no doubt that India's various states have launched fierce competition in the investment promotion of semiconductors and electronic manufacturing, and at least three states have announced special industrial policies.
(1) Gujarat
In July 2022, Gujarat Bang in western India took the lead in launching the semiconductor industry policy, which also promoted the subsequent Micron's settlement project.Gujerate sought to develop a "semiconductor city" in the Dollara Special Investment Zone (SIR). Through land and supporting policies, it aims to become a special manufacturing center for semiconductor and display factories.
In the Dorlala Investment Special Zone, the number of eligible projects will receive 75%of the subsidies for the top 200 acres of land, and additional land for upstream or downstream projects will receive 50%of land cost subsidies.Other incentives also include a 100%stamp duty and registration fee for one -time repayment, a fixed water fee of 12 rupees per cubic meter in five years, and 50%of the capital subsidy of the seawater desalination plant.The policy also provides subsidies for 10 years of electricity per kilowatt -while.In addition, the state further promised to implement a single -one window system to speed up customs clearance.
(2) Kanatakbang
Canatak Bang is already the leader of the Indian Electronics System Design and Manufacturing (ESDM) and semiconductor fields, accounting for 10%of India ’s national electronic product output.The center accounts for 40%of India ’s national electronic product output, 50%of the national electronic design output value, and the share of electronic product companies accounts for 50%.Canatak's IT industry is worth about $ 64 billion, and the number of employees exceeds 500,000.
Karnatak Bang provides 20%of capital investment subsidies for the capital expenditure of ESDM -related industries and machines, 25%of land expenditures below 50 acres of land, and other packages subsidy policies.The government will also continue to develop a larger infrastructure and labor environment required for the semiconductor industry. It has established two electronic manufacturing clusters in Mosol and Habali, and has received the letter of intention of investment in a large number of enterprises.
In terms of industry cooperation, the state government has invited APTIVPLC to establish a R & D center and is negotiating with other major global technology companies to develop a local semiconductor supply base.Through MKS Instruments, the government is exploring the new development of vacuum and photonology, expanding the state's software engineering capabilities and making better use of its skilled labor.The state also signed a memorandum of understanding with Kaynes Technology to build a printed circuit board manufacturer of 37.5 billion rupees.
(3) Orisa
Oriza has made significant progress in industrialization in eastern India in the past few years.Minerals such as iron ore, aluminum ore, manganese, coal and other minerals are essential raw materials for various industries.The government is also working hard to develop infrastructure such as ports, airports and industrial parks to promote the flow of goods and services.After the approval of the Bang Cabinet, the government announced its semiconductor and non -wafer policy in July 2023.The attachment to innovation and technology has led to many new R & D centers, such as the Institute of International Information Technology of the Bubaneswal International Information Technology and the National College of Science Education and Research.In addition, the government has launched a number of measures to promote entrepreneurship and support the development of small and medium -sized enterprises.
(4) Tamil Nadang
Tamil Nadang in the southeast is one of India's leading manufacturing states. It has 38,000 factories and has more than 50 special economic zones, which is the first of India's states.The state produces 62%of India's computers and peripherals, as well as 17%of electronic components.Among the four iPhone contract manufacturers in India, all three are located in Tamilnadbon.It is estimated that in 2023, the export value of the electronic product of the state will reach US $ 5.37 billion, an increase of 233%year -on -year.The local semiconductor companies are mainly engaged in design activities, and dozens of companies such as Dell, Bosch, Nokia, Siemens, KLA, Application Materials, Qualcomm, etc. have also set up a R & D center in the state.Qin Nai was rated as "the most economical place for the establishment of the Electronic R & D Center in the world" by economists. Penang, Malaysia ranked second, India's Gurion and Puna State in Penang ranked third in side by side, and Bandolor ranked seventh.
In order to attract the semiconductor value chain activity, Tamil Nadang has formulated a "flagship investment promotion subsidy" plan, providing three options: (1) 40%of flexible capital subsidies; (2) 10-25%of fixed capital subsidies;Or (3) 1.5-2%of Turnover subsidies in 10 years.In addition, in order to support the preliminary preparations of the enterprise, the state provides 50-100%stamp duty discounts, 25%environmental measures subsidies, and 20-50%of land subsidies.In terms of operation, it provides 100%of the five -year electricity fee exemption, 450 US dollars/person training, $ 1500/person R & D training, and a 50%limit of intellectual property creation and quality certification subsidies.The state also created a state -owned skill and recruitment platform to help industry mining technical workers and help students cultivate related skills.Provide more than 300 courses and 20,000 positions, more than 3,000 companies and 1.2 million students are using the platform.
8. The cooperative relationship between the United States and India in the semiconductor field
Out of the principles of complementary advantages, India and the United States are strengthening partnerships in the semiconductor field, especially the following key areas:
The US "Chip Act" provides $ 500 million for the International Technical Security and Innovation Fund (ITSI), and some of them can be assigned to India and other stakeholders.For example, in order to support the interests of design and foundries, the joint prototype testing platform can be established as a way to verify the design of innovative chips.Cooperation does not have to be limited to manufacturing activities, and early research on product development can be supported.ITSI funds can also be used to cooperate to establish world -class R & D centers and test facilities for developing embedded systems and semiconductor products.Only 3 million US dollars can establish up to 25 electronic manufacturing centers (EMC).
India can become the main provider of talents and technology to meet the needs of the continuous growth of semiconductor activities between the two countries.Although there are more and more related manufacturing courses in Indian semiconductors, teachers who still need to be qualified to teach these courses.Therefore, the Indian semiconductor delegation has signed a memorandum of teaching cooperation with Purdue University. In the future, India is expected to continue to expand cooperation with other universities in the United States.In this regard, the "Labor Education Fund" worth 200 million US dollars can provide financial support.
In May 2023, the National Science Foundation (NSF) and the Indian Ministry of Science and Technology (DST) signed a research cooperation implementation arrangement, allowing researchers of the two countries to write a proposal to expand cooperation in the field of microelectronics research.EssenceIn addition, the two parties can also consider establishing the ICET visa pilot program to promote the flow of STEM talents between the two countries.
In addition, in June 2023, India agreed to join the "mineral security partnership" (MSP) led by the United States, and both parties could jointly promote investment in related fields.
Picture source: "Lushan Zhenrong" WeChat public account
As European and American multinational companies promote the diversified supply chain, India is facing unique development opportunities and is expected to become the world's next high -tech industry investment and production destinations in high -tech industries.At present, India has played an important role in the global semiconductor value chain, especially in the field of R & D and design, and Micron's investment in India's investment testing (ATP) production capacity marks that India is actively moving towards the semiconductor manufacturing field.Although it is too early to enter 7nm and below, it is too early to enter the field of "traditional chips" manufacturing in large -scale applications.
India's semiconductor manufacturing foundation still needs to be deepened, such as key supporting facilities such as electronic manufacturing labor, logistics and transportation efficiency, power supply, local chemical industry and equipment industry. Compared with the India and Taiwan, there is still a gap in Southeast Asian countries.However, India has accumulated some accumulation in national strategy, industrial policies, large enterprises, local supporting facilities, and continues to improve the supervision and business environment, reduce the land, employment and tax costs of enterprises, and improve administrative efficiency (online single -handed window, etc.), Provided industrial subsidies (50%of the federal government funds, and 25%of local governments) have achieved reforms such as "big swords"Lucknow Wealth Management. At present, it is full of "red carpet" in the manufacturing investment investment.
Under the framework of the US -India "semiconductor supply chain and innovative partnership", the two sides still have a lot of room for cooperation, including joint development of microelectronics courses, strengthening research and development personnel exchanges, and providing further convenience and support for US -funded enterprises to settle in India.India's rich talent reserve and market space are expected to continue to undertake the technology and production capacity of the United States. While helping the "chip bill" landing, it also enhances India's position in the global semiconductor market.
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