The government has invited global and Indian firms to submit expression of Interest (EoIs) by April 30 for establishing display fabrication units in the country. The units will manufacture LCD, OLED, AMOLED or QLED based displays.
Currently, India is dependent on imports for these products.
A display fabrication plant manufactures the screens through a complex method, which includes sandwiching pieces of glass with transistor cells and use of metal alloys and silicon. This needs a minimum investment of over $2 billion. Such plants assemble the glass with other components required to power the screen. Most such plants also have an assembly unit.
As per experts, the technology is held by a select few companies in China, South Korea, Taiwan and Japan. China dominates the LCD market with over 70% share and Chinese firms have invested $50-70 billion. The premium OLED market is dominated by Samsung and LG, but the Chinese have made major investments here too.
In India, though, there are some assembly units that include Chinese players like Holitech, which import the glass. Samsung is also reportedly putting up a display plant in UP, primarily for mobile devices, at an investment of around Rs. 5,000 crore, but the details are not released.
The Ministry of Electronics and Information Technology (MeitY) has said it will likely prepare a scheme for setting up display fabrication units in the country based on the information in the submissions. The step comes in the wake of the government’s flagship production-linked incentive (PLI) scheme, which is aimed at making India a
hub for exports and to increase value addition in electronics. Setting up a display fabrication unit is the key to India’s aim to become Atmanirbhar.
This is because China is increasingly dominating the space across segments, building huge volumes. Without a domestic manufacturing facility, India might have no choice but to depend on the Chinese.
An executive of the India Cellular & Electronics Association (ICEA) said, “However, because of the huge minimum investment required, any manufacturing plant has to cater not only to Indian needs but for exports across the globe. So, it has to be competitive. Across the world, in such strategic areas, the government has to come in and help. And that is key”.
As per MeitY estimates, the market for displays in India is pegged at $7billion, but is expected to more than double to $15 billion by 2025, especially with the expected boost in production and exports of mobile devices, laptops etc.
-
Currently, India is dependent on imports for these products
Expected applicants, says MeitY, should either possess relevant IP and technology or one of the partners should in case of a joint venture. Else, the applicant should show intent to enter a purchase agreement with a firm that has the technology.
The second qualifier is that one, who should also have five years experience in running a commercial display fabrication facility. If the firm enters a purchase agreement for the technology, the latter should have an experience of five years.
The applicant requires to give a preliminary report of plans, investment, technology specifications and support it desires from the central and state governments to set up the unit. These could be grants in aid, viability gap funding in the form of long-term equity, long term interest-free loans, tax incentives, regulatory waivers and infrastructure support. From the states, firms could ask for capital subsidy, land value discounts in water and power tariffs amongst others.
To reduce import dependence, the government has already introduced a 10% duty on smartphone displays and touch panels. However, the move was criticised as mobile device manufacturers said it would boost the price of phones, especially as there are no Indian players manufacturing displays at present.
