Former HCL Chief Ajai Chowdhry Calls for Rs 44,000 Crore Allocation to Support Product Nation Initiative

The EPIC Foundation, as part of the Task Force established by the Ministry of Electronics and Information Technology (MeitY), has submitted a proposal to the government to accelerate India’s transformation into an “Electronic Product Nation.” The foundation has urged the government to prioritize this proposal in the upcoming budget, emphasizing the importance of meeting the demand for chips and electronic products locally.

“We are very keen that this proposal is considered favorably in the budget. It must be taken up as a high priority since the fabs will begin operations within the next two years, and we will otherwise remain dependent on export business,” said EPIC in a statement.

India is moving swiftly to secure strategic autonomy in the electronics and semiconductor sectors, with five semiconductor plants under construction and more planned. The central and state governments have allocated ₹90,000 crore for capital expenditure to support this initiative. However, experts stress the urgent need to boost domestic chip and system production to ensure the sustainability of these fabrication units.

The country currently relies heavily on imports for chips and related products.

To address this, the foundation has recommended creating a clear preference for "trusted Indian chips" in government procurement to support domestic manufacturers. A list of 30 priority chips and 30 critical products for domestic development has also been submitted.

The foundation has called for a budget allocation of ₹44,000 crore to support the initiative, including ₹15,000 crore for system products and ₹11,000 crore for semiconductor products. They argue that immediate investments in semiconductor production are critical to achieving self-reliance within a short period.

The EPIC Foundation has also urged the central government, along with the Ministry and Finance Minister, to evaluate the proposal critically and prioritize it in the budget. They argue that the timely implementation of these measures will enable India to transition into a global electronics manufacturing hub and achieve strategic autonomy.

In an interview with Outlook India, Dr. Ajai Chowdhry, Chairman of the EPIC Foundation, discussed the rationale behind implementing a new scheme despite being part of a government task force that had already recommended a plan to promote product development. This recommendation came at a time when tens of thousands of crores had already been committed to chip projects and electronics assembly initiatives.

Dr. Chowdhry emphasized the importance of developing domestic silicon fabs and packaging plants, with the Centre and state governments covering 70-75% of the costs. He pointed out that while global fabs already exist, securing enough business to ensure the success of these ventures is crucial. American and European companies, he noted, tend to prefer local fabs, making it imperative for India to focus on incentivizing product design and development.

“We must design products in India, not just make them. From make in India, we should now look to design and make in India. If you own a brand and you do your own R&D [research and development], the value addition is 50-60%. But, we are at the lower end. We basically screw drive products for just 5-10% value addition,” he said.

He further stressed that if you take the likes of Dixon or Flextronics, they are all manufacturing in India at low costs. The value addition, he highlighted, will happen when we actually design products in India and start creating Indian brands.