The Indian government is trying to turn around its overreliance on LED imports with policies to encourage both foreign and domestic manufacturers to establish LED Fabs under the Modified Special Incentive Package Scheme to provide cash grant of up to 20% of the cost of project to companies that set up semiconductor fab in India subject to a minimum initial investment of nearly $50 million.
Another incentive has been Preferred Market Access Policy of Government of India, in which the Indian government provides 50% of tendered quantity of LED products procured by the government to companies that do at least 50% value addition through manufacturing in India. To further reduce reliance on LED imports, a total of $2.5 billion has been injected into two major semiconductor subsidy programs.
More manufacturers are also vying the country’s promising LED market, which still depends highly on LED package and chip imports. Attracted by high market potential, over 2014 increasing international manufacturers have entered the Indian market. Japanese LED light manufacturers are some of the top LED makers that have decided to enter the Indian market in 2015.