• SOFR is the main replacement for Libor in the

United States. This benchmark is based on the

rates U.S. financial institutions pay each
other for overnight loans.
• These transactions take the form of Treasury
om
bond repurchase agreements, otherwise 5@
gma
il.c

1
av
known as repos agreements. They allow banks
rin
cyb
h arg

ip
to to meet liquidity and reserve requirements,
On
ly for

using Treasurys as collateral. SOFR comprises

the weighted averages of the rates charged
in these repo transactions.
• Ameribor- The American Interbank Offered
Rate (Ameribor) is a benchmark interest rate
that reflects the true cost of short-term
interbank borrowing. This rate is based on
transactions in overnight unsecured
loans conducted on the American Financial om
il.c
Exchange (AFX). 1 5@
gma
av
h arg
cyb
ip rin
ly for
• €STR- €STR stands for the Euro Short-Term
On

Rate, which is the benchmark rate at which

European banks engage in unsecured
euro-denominated short-term lending.
• SONIA- The Sterling Overnight Index Average
(SONIA) is the effective overnight interest rate
paid by banks for unsecured transactions in
the British sterling market. It is used for
overnight funding for trades that occur in
off-hours and represents the depth of il.c
om
ma
overnight business in the U.K. financial arg
av
1 5@
g

h
cyb
marketplace. ly for
ip rin

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 Alternate Investment Fund

• Alternative investment funds are privately pooled

investment vehicles that operate outside of
traditional investment opportunities.
om
il.c
• Managed by professional fund managers ma
5 @
g and
investment firms, these funds baim h a rga
v1
to generate income
cy
by investing in non-traditional
f or
ip rin asset classes such as
private equity, hedge funds,
On
ly
real estate, infrastructure,
commodities and venture capital.

• They are not open to the public at large, and

minimum investment amount is mandated at Rs 1
crore.
• Category I AIF:

• Category I alternative investment funds are

close-ended funds with a lock-in period of
three years. These funds invest in start-ups,
social ventures, small and medium-sized om
il.c
enterprises (SMEs), or other sectors that have av
1 5@
gma

arg
high growth potential and are of economic
ip rin
cyb
h

for
importance to the country.
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ly

• Venture Capital/Angel Funds/Infrastructure

Funds/Social Venture Funds
• Category II AIF
• Category II alternative investment funds are
funds that invest in a variety of stocks and
bonds. SEBI defines Category II AIFs as the
funds that do not fall under Category I and III
and which do not undertake leverage or ma
il.c
om
g
borrowing other than to meet day-to-day h arg
av
1 5@

cyb
operational requirements.
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ly for
ip rin

• These can be close-ended only with a lock-in

period of three years.
• Category III AIF
• Category III alternative investment funds are
proprietary private funds that use complex
and diverse trading strategies such as
arbitrage trading, margin trading, futures and
derivatives trading to achieve the goal of ma
il.c
om
g
generating short-term profits. These funds h arg
av
1 5@

cyb
aim to provide investors with short-term
ly for
ip rin

On
returns.

Category III alternative investment funds can

be both open and close-ended.
• Alternative investment funds investment option is
open for foreigners and NRIs.

• The minimum corpus requirement for each scheme is

Rs 20 Crore and Rs 10 crore for angel funds.

• The minimum amount of investmentl.cby om

an investor is
ai
Rs 1 crore. However, in case the investor v 15
@
gm happens to
rga
be an employee, director, orincfund yb
h a manager of an AIF,
ip r
he/she can invest a minimum
On
ly f or of Rs. 25 lakh.

• The maximum number of investors allowed to invest

under the Category I Alternative investment funds is
1,000 and in angel funds is 49.
• AIF Taxation Rules
• Following are the taxation rules of AIFs for each
category.

• Category I and Category II are pass-through vehicles.

The fund doesn’t have to pay any tax on its earnings.
However, the investors have to pay the i l . c om
tax at their
ma
respective tax slabs. If the fund has v1
5@ any capital
g
a
gains on stocks, then the investors r inc
y b ha
rg
have to pay 15% or
ip
10% depending on the holding
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ly f or period.

• Category III AIFs are taxable at the highest income tax

slab level (42.7%) at the fund level. The returns given
to investors are after deducting the tax.
• CDMDF, an alternative investment fund, will act as a
backstop for purchase of investment-grade corporate
debt securities. It will enhance secondary market
liquidity by creating a permanent institutional
framework for activation in times of market stress.

• During normal times, CDMDF will deal in low duration

government securities (G-sec), treasury . c om
bills, tri-party
l
repo on G-secs and guaranteed corporate 5 @
gm
ai
bond repo
v1
with maturity not exceeding seven
yb
h a rga days.
c
ip rin
ly for
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• Corporate debt securities to be bought by CDMDF
during market dislocation include listed money
market instruments, for which the long-term rating of
issuers will be considered,
• Once the market dislocation is declared by the regulator, the IM
would liquidate CDMDF’s existing portfolio created during the
normal times. The credit facility from the banks would be used,
and the overall cash available (capital from units’ holders plus
credit from banks) can be deployed in the corporate bond market.

• Only investment grade credit instruments including listed money

market instruments to be bought by the Fund from the specified
open- ended debt schemes of mutual funds, where there is
liquidity stress in the market, but the credit quality
om
is good.
c
m ail.
g
@
v15
rga
ha
yb
inc
ipr
yl for
• There are also prudential norms
On prescribed by the regulator which
the Fund would follow in terms of buying of debt securities i.e.,
not more than 5% of the amount available (Fund Capital i.e.,
corpus plus maximum permissible leverage) with single issuer
and not more than 7.5% with issuers from the same group.
• CDMDF will buy only investment-grade securities
from secondary markets, listed and having
residual maturity of up to five years.

• It will not buy any unlisted,

below-investment-grade or defaulted debt
securities or securities in respect ofm which there
is a material possibility of default @
gm
ailor
.co
adverse
credit news or views. bh
ar g a v1
5

cy
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• It will buy at a fair price (adjusted for liquidity
risk, interest rate risk and credit risk) but not at
distress price. The sellers of debt securities shall
be paid 90 per cent of the consideration in cash
and 10 per cent in terms of units of CDMDF.
• The units of CDMDF will be subscribed by AMCs of mutual funds
and specified debt-oriented MF schemes – open-ended debt
oriented mutual fund schemes excluding overnight funds and gilt
funds and including conservative hybrid funds.

• Specified debt-oriented mutual fund schemes will invest 25 basis

points (bps) of their assets under management (AUM) in the
units of CDMDF.

• AMCs will make a one-time contribution equivalent ail.c

om to two bps
of the AUM of specified debt-oriented mutual 1 5 @
gm fund schemes
v
managed by them. b h arg
a
cy
ip rin
fo r
ly
• AMCs of new mutual funds will also make a one-time
On
contribution equivalent to two bps of their specified
debt-oriented MF schemes, based on the AUM at the end of the
financial year following the one in which the specified schemes
are launched.
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
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 Deemed Exports
• The objective of the deemed export scheme is to
extend the benefits or incentives enjoyed by
exporters to suppliers who either contribute to
exports indirectly (for example, a supplier who
supplies his goods to an export-oriented unit) or
suppliers who contribute to specified gm
ail.c
om

infrastructure projects. h a rga

v1
5 @

cyb
rin
fo r ip
ly
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• The policy aims to empower India’s domestic
industry against the import of goods by providing
duty-free inputs and benefits or exemptions on
taxes or duties paid in India.
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
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• Following are the conditions defined in FTP for any
transaction to qualify as “deemed export”
– Only goods can qualify as Deemed Export. Services do not
qualify.
– The production of goods must take place in India.
– The goods should not transport outside India.
– The goods must be notified by the Central Government as
deemed exports under Section 147 ofmathe il.c
om Central Goods
g
and Services Tax Act, 2017 (CGSTgaAct) v1
5@
r
ha
– The transaction can be in Indian ipr
inc
y b
Rupees or any other
r
convertible foreign exchange.
O n ly f
o

– The goods supplied as Deemed Export cannot be processed

under a Letter of Undertaking (LUT) or a bond.
– The GST levied on the goods should be paid at the time of
supply. A full refund on this tax can be claimed.
• In addition to these conditions, the supply of goods to the
following is treated as Deemed Export:-

– If the goods are supplied to a party that has an Advance Authorisation

(AA)/ Advance License, such a transaction qualifies as a deemed export.

– If a person registered under GST supplies goods to an Export Oriented

Unit (EOU)/ Electronic Hardware Technology Park Unit (EHTP) /
Software Technology Park Unit (STP) / Bio-Technology Park Unit (BTP).
om
il.c
– Transactions made against Duty-Free Import@Authorisation
g (DFIA).
ma
5
av1
h arg
– If capital goods are supplied to a recipient yb who is a holder of an Export
r inc
ip
Promotion Capital Goods Authorisation
n ly f
o r (EPCG scheme), the transaction
qualifies as deemed export. O

– Goods that are supplied for UN projects as well as nuclear power

projects. Goods that are supplied for projects that are funded by
bilateral or multilateral agencies.
• Given below are the various benefits associated with deemed exports.

– Manufacturers of deemed exports can avail of a special import license at a

special rate. This rate is 6% of the freight on board value, i.e. the FOB value.

– Various units in industries like fertilisers, nuclear power projects, power, and
petroleum are eligible for a refund on the duty which is charged on imports.

– Deemed exports enjoy a refund of the terminal excise duty as per the details in
Schedule 4 of the 1944 central excise act.
om
– Advanced authorisation for a yearly requirement. il.c
gma
1 5@
av rg
– In the case of an advance release order where b ha the merchandise has been
cy
delivered, the supplier can obtain benefitsip rin of the special imprest license as well
as the deemed export drawback nscheme. or
ly f
O

– If the recipients have a zero-duty EPCG license, the suppliers can benefit from all
the said schemes except the special imprest license.
• However, deemed exports are not zero-rated, and
hence GST is levied on the goods that qualify as
deemed exports. The supplier can avail of a full
refund of this tax.

• Merchant Exports
m
• Merchant exports involve merchandise @
gm
ai l.co
that
5
exporters acquire and export y b ha to other countries.
r g a v1

inc
Merchant exporters buy n ly f
o products from domestic
r ipr
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manufacturers as well as from overseas
manufacturers. They repackage these products
and export them under their export brand. All
the associated risks, if any, are borne by them.
• What is Advance Authorisation Scheme
– Advance Authorisation Scheme allows duty free
import of inputs, which are physically incorporated in
an export product. In addition to any inputs,
packaging material, fuel, oil, catalyst which is
consumed / utilized in the process of production of
export product, is also be allowed.
om
il.c
– The quantity of inputs allowed for ma
5 @
g a given product is
based on specific norms defined h a rga
v1 for that export
yb
product, which considersor ithe
pri
n c wastage generated in
ly f
the manufacturing process.
On

– Advance Authorisation covers manufacturer

exporters or merchant exporters tied to supporting
manufacturer(s).
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
India-PTAs

om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
FTAs under Negotiation

om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
 Information Technology Agreement
(ITA)
• The original Information Technology Agreement
(ITA) was reached on 13 December 1996, through
a “Ministerial Declaration on Trade in Information
om
Technology Products”, at the first 5 @
gm WTO
ail.c

v1
Ministerial Conference, held
inc
y b ha in Singapore.
r g a

ipr
ly for
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• It led to the elimination of import duties on

products which in 2013 accounted for an
estimated US$ 1.6 trillion.
• The ITA covers a large number of high technology
products, including computers, telecommunication
equipment, semiconductors, semiconductor manufacturing
and testing equipment, software, scientific instruments, as
well as most of the parts and accessories of these products.

• The ITA requires each participant to eliminate and bind

customs duties at zero for all products specified in the
Agreement. ail.
co
m
gm
@
15
rgav
ha
• Because the ITA concessions are ip r inc included in the
yb
or
participants' WTO schedulesOn
ly of concessions, the tariff
f

elimination is implemented on a most-favoured nation

(MFN) basis. This means that even countries that have not
joined the ITA can benefit from the trade opportunities
generated by ITA tariff elimination
• Under the terms of the agreement, the majority of
tariffs will be eliminated on the 201 products within
three years, with reductions beginning in 2016.

• By the end of October 2015, each of the participating

members will submit to the other participants a draft
schedule which spells out how the terms of the
agreement would be met. Participants ail.c
omwill spend the

coming months preparing and verifying v1

5 @
gm these
a
schedules. inc
y b ha
rg

ipr
ly for
On
• The agreement also contains a commitment to tackle
non-tariff barriers in the IT sector, and to keep the list
of products covered under review to determine
whether further expansion may be needed to reflect
future technological developments.
• Transactions of up to Rs 7 lakh per annum per
individual, other than for purchasing overseas
tour program packages, do not draw any TCS. For
example, if an individual spends Rs 8 lakh in a
financial year, s/he would not be taxed for the
initial Rs 7 lakh spend, but would be charged as
per the rate corresponding to the nature il.c
om of
a
transaction for the additionalgaRs
v1
5 @ 1 lakh spend.
gm

r
ha
yb
inc
ipr
ly for
On
• This is not a purpose-specific but a combined
threshold; that is, irrespective of the purpose, if
an individual’s remittances exceed Rs 7 lakh, it
would be liable to taxation.
• It was proposed in the Union Budget that the TCS for
purchase of overseas tour packages be increased from 5%
to 20% if the upper limit is breached. The same was to
apply for payments made for purposes other than
education (whether or not financed by loan) and medical
treatment. The implementation has now been deferred by
three months.

• Purchase of tour packages, at present, draws

il.c
om TCS at 5%
a
and does not have any threshold. 15@gm
rgav
ha
cyb
rin
• The same rate applies for transactions
n
r ip
ly f
o exceeding the
threshold other than for education
O
(financed by loan).

• No changes were made with respect to remittances for

educational purposes and medical treatment, both within
and beyond the threshold.
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
• The government also announced
that transactions facilitated using
international credit cards while being
overseas would not fall under the LRS
umbrella and therefore, will not be subject to
TCS. ma
il.c
om
g
1 5@
av
h arg
cyb
ip rin
ly for
On
 Credit Ratings
• A credit rating agency is an entity which assesses the
ability and willingness of the issuer company for timely
payment of interest and principal on a debt instrument.

• Credit rating is an assessment of the probability of

default on payment of interest and principal ail.c
om on a debt
m
instrument. It is not a recommendation a v 15
@
g
to buy, sell or
hold a debt instrument. nc
y b ha
rg
i
ipr
ly for
On
• Rating only provides an additional input to the investor
and the
investor is required to make his own independent and
objective analysis before arriving at an investment
decision.
• The ratings are used in structured finance transactions such as
asset-backed securities, mortgage-backed securities, and
collateralized debt obligations. Rating agencies focus on the
type of pool underlying the security and the proposed capital
structure to rate structured financial products. The issuers of
the structured products pay rating agencies to not only rate
them, but also to advise them on how to structure the
tranches.

• Rating agencies also give ratings to sovereignomborrowers.

Sovereign borrowers include national governments, g m ail.
c
state
governments, municipalities, and other r g a v1 sovereign-supported
5 @

institutions. The sovereign ratings inc

ygiven
b ha by a rating agency
r
shows a sovereign’s ability toly forepay
r ip its debt.
On

• The ratings help governments from emerging and developing

countries to issue bonds to domestic and international
investors. Governments sell bonds to obtain financing from
other governments and Bretton Woods institutions such as
the World Bank and the International Monetary Fund.
 Credit Ratings
• A credit rating agency is an entity which assesses the
ability and willingness of the issuer company for timely
payment of interest and principal on a debt instrument.

• Credit rating is an assessment of the probability of

default on payment of interest and principal ail.c
om on a debt
m
instrument. It is not a recommendation a v 15
@
g
to buy, sell or
hold a debt instrument. nc
y b ha
rg
i
ipr
ly for
On
• Rating only provides an additional input to the investor
and the
investor is required to make his own independent and
objective analysis before arriving at an investment
decision.
• The ratings are used in structured finance transactions such as
asset-backed securities, mortgage-backed securities, and
collateralized debt obligations. Rating agencies focus on the
type of pool underlying the security and the proposed capital
structure to rate structured financial products. The issuers of
the structured products pay rating agencies to not only rate
them, but also to advise them on how to structure the
tranches.

• Rating agencies also give ratings to sovereignomborrowers.

Sovereign borrowers include national governments, g m ail.
c
state
governments, municipalities, and other r g a v1 sovereign-supported
5 @

institutions. The sovereign ratings inc

ygiven
b ha by a rating agency
r
shows a sovereign’s ability toly forepay
r ip its debt.
On

• The ratings help governments from emerging and developing

countries to issue bonds to domestic and international
investors. Governments sell bonds to obtain financing from
other governments and Bretton Woods institutions such as
the World Bank and the International Monetary Fund.
• What are investment and speculative grade ratings?

• An investment grade rating signifies the rating

agency’s belief that the rated instrument is likely to
meet its payment obligations. In the Indian context,
debt instruments rated 'BBB-' and above are
classified as investment grade ratings.
om
il.c
• Instruments that are rated ‘BB‘ and ma
5 @
g below are
classified as speculative gradebharcategory
ga
v1
ratings in
which case the ability tofomeet
r ip rin
cy
the payment
obligations is considered
On
ly
to be “speculative”.
Instruments rated in the speculative grade are
considered to carry materially higher risk and a
higher probability of default compared to
instruments rated in the investment grade.
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
 PM-PRANAM
• 50% subsidy savings will be passed on as a grant to the state that saves
the money

• 70% of the grant provided under the scheme can be used for asset
creation related to technological adoption of alternate fertilisers and
alternate fertiliser production units at village, block and district levels.
om
il.c
gma
• The remaining 30% grant money can be used 5@
a v1 for incentivising farmers,
rg
panchayats, farmer producer organisations y b ha and self-help groups that are
inc
involved in the reduction of fertiliser
for
use and awareness generation.
ip r
ly
On

• Government will compare a state’s increase or reduction in urea in a

year, to its average consumption of urea during the last three years. Data
available on a fertiliser Ministry dashboard, iFMS (Integrated fertilisers
Management System), will be used for this purpose.
 om
il.c
gma
1 5@
av
h arg
cyb
ip rin
ly for
On
• A focus on the entire ecosystem, not merely on one
fabrication unit.
• The programme envisages building the entire
semiconductor ecosystem—from design to
manufacturing to assembly and packaging—instead of
just focusing on one semiconductor fabrication to start
operations in India.
• This articulation is significant because India’s
comparative advantage has long been in semiconductor m
design; nearly every major global firmgmin ail. the sector has
co

its design house here. rg a v1

5@
ha
• The Rs 76,000 crore packageipwillrin
cy support
b

for
– 100 domestic semiconductor
O
design companies,
nly
– 15 compound semiconductors and semiconductor packaging
units,
– two fabrication units, and
– two display fabs.
• A 20-year roadmap, not merely a one-off incentive
scheme
– The package includes creating an independent India
Semiconductor Mission (ISM) of global experts to “drive
the long-term strategies for developing sustainable
semiconductors and display ecosystem”.

• A shot in the arm for domestic semiconductor om

il.c
design firms 1 5 @
gm
a

av
– Though India is a semiconductor ha
rg
cyb
design powerhouse,
few Indian companies own o r iprthese designs’ intellectual
in
ly f
property (IP). In this regard,
On an emphasis on
semiconductor design through the new Design Linked
Incentive (DLI) scheme for semiconductor design firms is
a positive step. The DLI scheme provides financial
incentives to help domestic design firms obtain costly
software licenses (also known as Electronic Design
Automation tools) and reduce IP acquisition costs.
• A clear target of two semiconductor fabs and
two display fabs
– Fabrication units require billions of dollars of
recurring capital investment. World over,
governments have played a role in sharing this
investment burden. The programme mentions fiscal
support of up to 50 per cent of the total project
cost. In the past, the government had committed to
an incentive of 25 per cent on capital
il.c
om expenditure.
a
gm
@
v15
rga
– Besides fiscal support, this rin
cy bstage
ha also requires
p
high-grade power and On
l y fwater
or
i
supply, subjects that
fall under the remit of state governments. Another
positive step is the commitment to work with a few
state governments to create suitable infrastructure
(land, uninterrupted water and power).
• Incentives for the assembly, test, and
packaging stage
– The outsourced assembly and test (OSAT)
segment in the semiconductor supply chain is a
significant opportunity for a labour-abundant
country like India. These units areomnot as capital
c
ail.
intensive to set up or run as vfabrication 15
@
g m
a
arg
facilities. Government support p r inc
yb
h in the form of
i
for
financial support ofOn30 per cent of the total
l y

capital expenditure can attract major OSAT

semiconductor companies to the country.
• Need For DLI-
– The scheme acknowledges that semiconductor
design is India’s comparative advantage. It says
that:
• Nearly 20% of the world’s design engineers are in India
• India has a thriving semiconductor design ecosystem.
– The problems identified under the scheme are:
• Not a lot of Intellectual Property (IP) belongs to Indian
companies. This is problematic as countries om are known to
il.c
put strict export controls in this domain. @
gm
a So, even if a
5
foreign company X has a design a rga house in India, the
v1
h
country where X is headquartered in cyb can forbid an Indian
ipr
customer from using the n ly f products made by X in India.
o r
O
• The cumulative revenue of domestic semiconductor
design companies is really really small, less than ₹150
crores.
• no specific incentive for semiconductor design firms
earlier.
• For companies willing to invest a minimum of Rs 20,000 crores
in a logic/memory/analog/Mixed-signal fab at <=65nm in India,
the union government is committing fiscal support of up to:
– 50 per cent of project cost for 28nm or lower
– 40 per cent of project cost for 28nm to 45nm
– 30 per cent of project cost for 45nm to 65nm
• Applications are open for 45 days initially starting 1 Jan 2022.
Support will be extended to at least two applicants for six
years.
• Disbursement from the union government will o m
match the
c
capital investments by investors at a predefined g m ail. ratio, not
exceeding 50 per cent. r g a v1
5 @

ha
• Selection of applicants will be onprinQuality
cy b and Cost Based
i
Criteria (QCBS), not L1. Evaluation
n ly f
o r
will be done by the newly
O
proposed India Semiconductor Mission. Composed of industry
experts, this body is tasked with “driving the long-term
strategies for developing sustainable semiconductors and
display ecosystem”.
• Scheme for setting up of Compound
Semiconductors, Silicon Photonics, Sensors Fab
and Semiconductor Assembly, Testing,
Marking and Packaging (ATMP), OSAT facilities
in India

– The scheme provides incentives foril.cbroadly om two

unrelated things. One, for specialised 1 5 @
gm
a
fabs used to
v
manufacture high frequency, yb
h arghigh power,
a

nc
optoelectronic devices.for ip r i
ly
On

– Two, for units that do Assembly, Test, Marking, and

Packaging (ATMP) of conventional silicon
semiconductor chips.
• Specialised Fabs included under this policy relate to:
– compound semiconductors: The use of compound semiconductors is
expected to grow for high voltage applications, LED-powered appliances etc.
• For instance, the use of GaN for chargers is beneficial as it can operate at higher
voltages without conduction losses. These products also switch more efficiently, and
hence low switching losses. The overall effect is that devices such as power chargers
can be made much smaller using compound semiconductors because the heat to be
dissipated is much lower. For more, read this by STMicro.
• GaAs is used for Surface-mounted Device LEDs used in our bulbs. Silicon
semiconductors emit energy in the infrared range and hence are not suitable for
such applications.

– SiPho Fab. Silicon Photonics allows for higher interconnect speeds,

supporting higher data rates. A lot of energy in information om processing
il.c
apparently is used up in the communications — not gm logic — over a chip
a
because conventional interconnects need toavbe @
15 discharged and charged for
g
data transfer. Optical communication offers b ha hope here. For more, see this
r
cy
article in Physics World The promiseipof
rin silicon photonics – Physics World
for
O nly
– MEMS (Microelectromechanical Systems): expected to find more
applications in healthcare, EVs.
• ATMP units: OSAT (Outsourced
Semiconductor Assembly and Test) is a
stage of the conventional semiconductor
production process.

– This is where India has a potentialomadvantage

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because of the need for a large, @
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trained workforce for this cyb
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in comparison
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to logic or memory fabs.
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This stage does require
O
high-end equipment but the recurring capital
investment required is lesser than silicon logic
or memory fabs. Of course, cost margins are
also lower.
• Scheme Details
– The specialised fabs, companies or joint ventures (not necessarily Indians)
with relevant past experience need to commit to a minimum capital
investment threshold of ₹100 crores. The capacity commitment is roughly
500 Wafer Starts Per Month for 150/200mm wafer size. After evaluating all
applications, the union government will provide financial support of 30%
capital expenditure.

– For the ATMP, companies or joint ventures (not necessarily Indians) with
relevant past experience need to commit to a minimum capital investment
threshold of ₹50 crores. After evaluating all applications, the union
government will provide financial support of 30% capital expenditure.
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– Tenure: the scheme is open for applications initially
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years starting 01-01-2022. arg
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– The disbursement of the financial r ip
ly fsupport begins after the capital
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n
investment threshold has beenOcrossed and commercial production has
begun.
• Scheme for Setting up of Display Fabs in India
– Further, the document goes on to say that the reason display
fabs haven’t succeeded is that manufacturers here face a 10%
cost disadvantage due to “the lack of adequate infrastructure,
domestic supply chain and logistics; high cost of finance; and
focus on R&D by the industry; and inadequacies in skill
development.” To compensate for this disability, an industrial
policy instrument of part-financing two display fabs has been
conceived.
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– Most of the display panel manufacturers il.c
are located in East
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Asia — companies from China, Taiwan, g a v1
5 South Korea, and

Japan dominate this industry. incybhar

r ip cost of mobile devices and 50 per
• displays account for 25 pery cent
f or
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cent cost of LED/LCD TV OSets.
• The LCD market is dominated by China while the OLED market is
dominated by Samsung and LG (both South Korean companies).
• The strategic case seems to be to reduce import dependence on
China.
• Scheme Details
– For companies willing to invest a minimum of Rs 10,000
crores in manufacturing AMOLED or TFT LCD screens in India,
the union government is committing fiscal support of up to 50
per cent of the project cost.

– Applications are open for 45 days initially starting 1 Jan 2022.

Support will be extended at most to two display fab
manufacturers.
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– Disbursement is from the union government ma g will match the
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capital investments by investors atrgaav1predefined
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ratio, not
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exceeding 50 per cent. rin
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or
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On
– Selection of applicants will be on Quality and Cost Based
Criteria (QCBS), not L1. Evaluation will be done by the newly
proposed India Semiconductor Mission. Composed of industry
experts, this body is tasked with “driving the long-term
strategies for developing sustainable semiconductors and
display ecosystem”.