India’s digital revolution to get a semiconductor push

The recently concluded three-day conference, ‘SemiconIndia – 2023’, centered around ‘Catalysing India’s Semiconductor Ecosystem,’ aimed to further boost the sector and showcase the remarkable growth in India’s digital and electronic manufacturing industries. India’s most valuable asset, its skilled manpower, could help mitigate the shortage in the global semiconductor industry, a shortage that experts predict will worsen in the years ahead due to increased demand.

Why is India striving to become a semiconductor manufacturing hub? What are its objectives? How will this drive impact India’s technology revolution? The significance of semiconductors cannot be overstated; they are the foundational elements of modern technology and play critical roles in emerging technologies such as artificial intelligence, internet of things applications, 5G communications, electric vehicles, and more. With the evolving global landscape in emerging technologies, the semiconductor industry is poised for substantial growth. The government’s vision to reduce import dependency, establish domestic manufacturing capabilities, and attract investments in this sector are timely and effective measures.

The United Nations Conference on Trade and Development’s 2023 Technology and Innovation Report underscores the need for countries to swiftly embrace new frontier technologies, which will contribute to green innovation and help mitigate the climate crisis. The report also emphasizes that developing nations should establish the groundwork to reap the economic benefits associated with these new technologies.

India’s push to bolster its tech sector gained momentum with the launch of its semiconductor mission in 2021. However, the journey of digital transformation began earlier in 2015 with the launch of the transformative ‘Digital India’ program. This initiative reshaped the country’s digital landscape, fostering a digitally empowered society and knowledge economy.

Among the notable advancements is the digital economy, which has been a driving force behind India’s economic transformation. While ‘Digital India’ catalyzed grassroots-level technological advancements, the government introduced The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. This act provided a pivotal link for targeted delivery of subsidies and services through unique identity numbers – Aadhaar numbers. Aadhaar facilitated the rollout of Direct Benefits Transfer (DBT), preventing leaks and simplifying management overhead by directly transferring subsidies and benefits to linked bank accounts.

Significantly, Aadhaar proved to be instrumental in achieving efficient, transparent, and targeted governance, delivering subsidies, benefits, and services to citizens. Thanks to continuous governmental support, changing consumer behaviors, and evolving business ecosystems, India’s internet economy is poised to experience substantial growth in the coming years. A joint report by Google, Temasek, and Bain and Company projected India’s internet economy to reach $1 trillion by 2030, up from $175 billion in 2022.

Attributing this surge to the digitization shift, the report indicated that the internet economy’s contribution to India’s technology sector would increase to 62% by 2030 from 48% in 2022. It is also expected to account for 12-13% of India’s GDP. The report underscored that the Digital India Movement, coupled with the demonetization event in November 2016 and the drive towards cashless transactions, significantly boosted the digital business landscape.

Looking ahead, in 2017, Prime Minister Narendra Modi launched the UMANG App, consolidating numerous government services onto a single mobile application, making government services accessible via citizens’ mobile phones. UMANG offers over 1668 e-services and more than 20,197 bill payment services.

Launched in 2016, the Unified Payment Interface (UPI) has emerged as a favored tool for digital transactions in India, accounting for 40% of all payments.

In alignment with the government’s commitment to digital transformation and the ‘Techade’ vision, the budget for Digital India was increased by 67% for 2023-24. Furthermore, the budget estimate for the Ministry of Electronics and Information Technology surged by 40% to Rs 16,549.04 crore.

India’s semiconductor initiative is poised to drive its tech sector and foster ongoing digital transformation, fostering the growth of ‘frontier technologies’ in the years ahead.

Satnam Singh Sandhu

The writer is the founding chancellor of Chandigarh University. He has also founded the Chandigarh Welfare Trust