Ministry of Electronics and IT Secretary S. Krishnan said that the government is expanding the scope of chip production incentives and expects that a slew of companies will participate. In a conversation with NDTV Profit, the senior bureaucrat talked about a wide range of issues, including the government plan on import rules for IT hardware products such as laptops and tablets and delays in notifying data protection rules.
Here are the excerpts from the conversation-
The India Semiconductor Mission saw five proposals from the likes of Tata Electronics, CG Power, Micron, and others being approved. How has their response been so far?
Actually, we may be able to accommodate two or three additional chip facilities in the India Semiconductor Mission 1.0. So the number will go beyond five, up to seven or eight proposals being approved. Some proposals are being evaluated, and we should be able to pilot through them. Together, these seven to eight proposals will use up the entire Rs 76,000 crore allocation for ISM 1.0.
Of the Rs 76,000 crore, Rs 1,000 crore has been allocated to the design-linked incentive scheme, under which we have identified 13 companies and more are being identified. It has been very successful, given that we need Indian intellectual properties, and these companies will be able to keep our fabs fully occupied. Another Rs 10,000 crore is set aside for the revival of the Semiconductor Laboratory in Mohali. The first round of expressions of interest has been completed for that, and on the basis of that, we'll be able to put out a request for proposal soon.
The remaining Rs 65,000 crore will be given to the companies selected under ISM 1.0, leading to complete allocation of funds.
Raw materials needed to produce chips at scale are still not available domestically. In what direction is India moving with respect to materials? Also, at Semicon India in August, Union Minister Ashwini Vaishnaw also announced ISM 2.0. How is that shaping up?
We're taking an ecosystem approach with regards to ISM 2.0. The roadmap is being prepared, and Minister Ashwini Vaishnaw had then said it will be ready in two to three months. The next leg of India's semiconductor journey will focus on raw materials for chips. We will encourage companies that produce materials, gases, chemicals and chip equipment firms under ISM 2.0.
As the import monitoring system is set to end by Dec 31, what is the government's plan on import rules for IT hardware products? Do we foresee an extension of that system?
Answer
We don't look at the import management system as a restriction of any kind. Our only concern is security. We need to be able to trace where our IT hardware is coming from, purely for security reasons. The system itself will be extended for another year. We will review the decision during calendar year 2025 on what is to be done with the scheme next.
India has rapidly progressed to being an electronics manufacturing hub, especially with smartphones. Is it time we move to becoming an export hub now?
In 2014-15, we were importing 75% of our domestic smartphone requirements. Today, we make 99.2% of our smartphones; about 33 crore smartphones are being made annually now. So we've completely flipped that. But now, more or less, our domestic market is almost saturated. We have about a billion users, and the change frequency of phones is about once in 3 years. So we need to now focus on more smartphone exports from India.
Further, as many as 27 companies have expressed interest in the PLI scheme for IT Hardware 2.0. Major companies are set to commence manufacturing starting April 1, 2025, and with those schemes, we're looking to increase the domestic value addition component.
The much-awaited Digital Personal Data Protection rules are now ready. We've been hearing that they're ready for a while. What are the concerns that are still being addressed?
The DPDP Act is ready, but the rules are not under the final stages of preparation. It's an important piece of legislation, impacting various bodies and ministries, so we want to be thorough with it. It is also important that a legislation of this kind is done without disturbing current practices. We're still in process of consulting various ministries before we go public with draft rules. After the rules are notified, there will be time for feedback and enough time to help companies with the transition. We have addressed the question of certain ministries being exempted. The final notification of DPDP rules may spill over to 2025, but we are hoping to get the draft rules out before this year ends.
Another important set of legislation that the MeitY is working on is governing AI. What we're hearing is that a separate AI regulatory body won't be needed. Instead, a voluntary code might be enough. How's that shaping up?
There are various aspects to governing artificial intelligence. Under the DPDP Act and rules, a lot of issues pertaining to personal data use and consent with regards to AI will be taken care of. The existing IT Act is also robust enough to deal with copyright issues and fake news. To a significant extent, existing rules and social media intermediary guidelines already govern deepfakes. Where the voluntary AI ethics code can come in is to help strike a balance between AI misuse and innovation. It will cover how data can be used, the explainabilities, as well as rules for AI labeling on social media platforms.
That being said, a voluntary code doesn't mean we can't legislate AI. The government will always retain the right to legislate. And we're very closely studying AI governance in other jurisdictions and nations. As the chair of the Global Partnership on Artificial Intelligence, India gets a fair idea of AI laws. If there's a need to legislate AI, we can step in and do it. But at this point in time, we don't see the need for additional legislation.
There have been cases of cracking down on content on social media platforms. A prominent finfluencer recently had 17 of their videos taken down from YouTube at the request of a government entity. What are the risks that the government is seeing?
The government is very careful about this, and we do it only if certain content is against the provision of interests of the security and sovereignty of India, friendly relations with foreign states, public order, decency, or morality in relation to contempt of court, defamation, or incitement to an offense. All of these are tests of reasonable restrictions under Article 19(2) of the Constitution.
We only take down content when it is warranted. The law also empowers concerned state governments and ministries to take down content. But you'll see that about 99% of the content that is taken down is removed by social media platforms themselves. The government steps in only when public safety or order is in question. If content creators have grievances, there are mechanisms to seek redressal via the grievance officers.
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