2. This global supply chain is intricate, with raw materials and components often crossing several international borders
before becoming part of a finished product. For India, which is still developing its semiconductor manufacturing
capabilities, this means a heavy reliance on imports.
Overview of the Semiconductor Supply Chain
3. Tailored Export-Import Policies
The Indian government has implemented several policies to boost
the local semiconductor industry. These include:
Subsidies and Incentives: The Indian government has offered
financial incentives to attract semiconductor manufacturers.
While this has potential, the effectiveness of these incentives in
the face of global competition remains to be seen.
Import Duties and Restrictions: High import duties on
semiconductor components can increase the cost of
production for companies manufacturing in India, making them
less competitive globally. Conversely, reducing these duties
might not favor local manufacturers.
Export Controls: Compliance with international export control
regimes (like the Wassenaar Arrangement) complicates the
export-import dynamics, especially for advanced technologies.
4. Extensive
documentation and
strict compliance
requirements can
lead to delays in
clearing shipments.
Documentation and
Compliance
Customs Clearance
Challenges
Customs clearance in India is notoriously complex and can cause significant delays in the
supply chain. Challenges include:
Pre-arrival Clearance
Infrastructure
Bottlenecks
Limited
infrastructure and
manual processing in
some ports and
airports can lead to
additional delays.
While initiatives like
the Authorized
Economic Operator
(AEO) program are
intended to facilitate
smoother customs
processes, many
companies still face
pre-arrival clearance
issues.
5. Collaborations and
joint ventures with
global leaders are
needed to transfer
knowledge and skills.
Technology Transfer
and Expertise
Domestic Manufacturing
Challenges
India’s ambition to establish a robust domestic semiconductor manufacturing ecosystem
faces hurdles:
Capital Intensive
Nature
Supply of Raw
Materials
Dependence on
imports for critical
raw materials and
chemicals adds
vulnerability to the
supply chain.
Semiconductor
fabrication plants
(fabs) require
massive capital
investment, along
with sustained R&D
expenditure.
6. Strategies for Mitigation
Modernizing and digitizing customs procedures can reduce
delays.
Streamlining Customs Processes
Investing in local R&D, education, and infrastructure to
develop an indigenous supply chain.
Developing Local Ecosystems
Building partnerships with key countries and companies can
help in technology transfer and stable supply chains.
Strategic Partnerships
Clear and stable policy frameworks can attract more
investment and build confidence among stakeholders.
Policy Frameworks
7. Know more
Semiconductor Supply Chain: Impact of Trade Policies,
Tariffs, and Geopolitical Factors
Global Supply Chain Challenges in the Semiconductor
Industry: Navigating the Storm with Innovative Solutions
Unlocking Precision: How Digital Twins Revolutionize
Semiconductor Supply Chains
Sustainability in Semiconductors: Paving the Way for a
Green Supply Chain
8. LET'S GET IN TOUCH
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