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Future of Indian Economy: Why the Modified Display Fab Policy Can Change It?

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What is the Modified Display Fab Policy?

What Does the Modified Display Fab Policy Mean for the Future of Indian Economy?

How the Modified Display Fab policy can boost the Make in India Initiative?

What are the Potential Challenges for the Modified Display Fab policy?


In the last few years, India has positioned itself as a formidable player in the global electronics and manufacturing arena. At the heart of this transformative journey lies the Electronics System Design and Manufacturing (ESDM) policy, supported by a $10 billion incentive plan.

While the semiconductor fab scheme has garnered attention, the Modified Display Fab policy, with similar incentives, remains in the shadows. Know about the crucial role that could be played by the Modified Display Fab policy in reshaping the future of Indian economy in the coming years.

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What is the Modified Display Fab Policy?

India’s Modified Display Fab policy is a strategic initiative aimed at fostering innovation and creating an investor-friendly environment for the display industry. With a 50% pari-passu subsidy, the policy provides financial incentives such as capital subsidies, tax reimbursement, and interest subvention on loans for eligible display fabrication units.

This initiative is a part of the broader goal to reduce the nation’s reliance on imported displays, establish India as a global hub for display manufacturing and ensure an even better future of Indian economy.

Today, India stands at a crossroads, akin to the strategic investments South Korea made in display glass fabrication technology, propelling it to global eminence. With the right policies and incentives, India can replicate this success story, making significant strides in display technology. The removal of subsidy caps and international partnerships signal a positive trajectory, with the government actively inviting more participants.

Read on – Indian Economic Growth: Top Reasons Why India Will Soon Be a $4-Trillion Economy.

What Does the Modified Display Fab Policy Mean for the Future of Indian Economy?

The electronics industry forms the cornerstone of the future of Indian economy, permeating various sectors. With a projected global Electronics Manufacturing Services (EMS) market value of $1,145 billion by 2026, India is strategically positioned to capitalize on emerging technologies.

The LCD market, in particular, offers a shining opportunity, with a projected value of $231.75 billion by 2030. However, India’s current dependence on imported displays poses a challenge to its ambition. The Modified Display Fab policy addresses this challenge by offering a significant boost to the domestic display market.

Boost to the domestic display market

Anticipated to triple in size by 2030, the Indian display market, valued at $7 billion in 2020, is expected to reach $15 billion by 2025. This growth trajectory necessitates at least 10-12 display fabrication units to meet the surging demand. The policy’s financial incentives aim to attract investments in the future of Indian economy, making display manufacturing in India more competitive.

Ensuring the entry of more players

Presently, only a few companies have expressed interest in manufacturing display fabs in India. Notably, the Vedanta Group, in partnership with Innolux, and Elest (backed by Rajesh Exports) are among the early entrants. The recent removal of the INR 12,000 crore cap on maximum subsidy allocation has enhanced the scheme’s attractiveness, inviting more players to explore opportunities in the Indian display market.

More jobs and entrepreneurship opportunities

The Modified Display Fab policy emerges as a potential game-changer for the future of Indian economy. As the government modifies the production-linked incentive (PLI) scheme, offering a uniform fiscal support of 50% for semiconductor fabs and display manufacturing, the stage is set for accelerated investments in this sector.

The policy’s impact extends beyond reducing import dependencies; it has the power to revolutionize electronics manufacturing, boost entrepreneurship, and create employment opportunities.

How the Modified Display Fab policy Can Boost the Make in India Initiative?

The Modified Display Fab policy stands as a catalyst for bolstering the Make in India initiative, providing a significant impetus to domestic manufacturing. As India endeavors to improve the future of Indian economy by reducing its dependence on imported displays, this policy becomes a linchpin in fostering indigenous production capabilities.

The financial incentives embedded in the policy, including capital subsidies, tax reimbursements, and interest subvention, not only attract investments but also make display manufacturing in India more cost-effective and competitive.

With substantial incentives for domestic display manufacturing, India aims to change the future of Indian economy for the better. The Indian Government is keen to build self-sufficiency in critical technologies, fostering economic independence and mitigating dependencies on Chinese imports in the electronics sector.

By encouraging the establishment of display fabrication units on Indian soil, the policy aligns seamlessly with the broader Make in India campaign, which aims to transform the nation into a global manufacturing hub. The envisaged growth of the display market from $7 billion in 2020 to $15 billion in 2025 underscores the potential for job creation and economic expansion.

Furthermore, the removal of the INR 12,000 crore subsidy cap and active international partnerships, as exemplified by the collaboration between Vedanta Group and Innolux, demonstrate a commitment to creating an ecosystem conducive to both local and global players.

This convergence of policy support and industry interest positions India on the trajectory to self-reliance, technological advancement, and a pivotal role in the global electronics market. This can ultimately amplify the success of the Make in India initiative and ensure a brighter future of Indian economy.

What are the Potential Challenges for the Modified Display Fab policy?

One significant hurdle is the current limited interest from companies in establishing display fabs in the country. Despite the removal of the INR 12,000 crore subsidy cap and other attractive incentives, the industry has witnessed only a handful of players, such as the Vedanta Group and Elest, expressing interest.

The capital-intensive nature of display fab setup poses another challenge for the future of Indian economy. Establishing fabrication units demands substantial financial investment, and companies may be cautious due to the associated risks. Convincing global players to shift their manufacturing bases to India requires a compelling proposition, considering established hubs in countries like China and South Korea.

Moreover, the pace of technological advancement is rapid, and the policy’s success hinges on India’s ability to stay ahead in terms of innovation. Continuous technological upgrades and staying competitive in emerging display technologies like OLEDs are crucial to ensuring the sustained relevance of the policy.

Additionally, the global supply chain dynamics, geopolitical factors, and fluctuations in raw material prices can impact the cost-effectiveness of display manufacturing in India.

Read on – Indian Economic Growth Story: The Contribution of the Smart Watch Market.

Despite these challenges, successful navigation could unlock unprecedented opportunities in the global electronics market and change the future of Indian economy. Addressing these challenges requires a holistic approach, including proactive government measures, industry collaboration, and ongoing adaptation to the evolving global economic landscape.

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As India navigates the trajectory of its electronics industry, the Modified Display Fab policy, along with localized system design and strategic investments, holds the key to not only achieving self-reliance but also emerging as a prominent hub for electronics exports. The future of Indian economy may very well be shaped by the success of this policy, marking a transformative leap in the nation’s journey towards technological self-sufficiency.

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