January 5, 2025

Current Affairs

Draft National Policy Framework on Agricultural Marketing

Context: The Union Ministry of Agriculture and Farmers Welfare has recently released the draft National Policy Framework on Agricultural Marketing (NPFAM). Samyukt Kisan Morcha (umbrella organisation of farmers’ outfits) has raised concerns regarding the new draft Policy, labelling them worse than the three repealed farm laws.

Relevance of the Topic: Mains: Draft National Policy Framework on Agricultural Marketing -Salient Features.

Policy Interventions in the new draft NPFAM

1. Market Architecture:

Market density: minimum one market for 80 sq.km area.
Farm-Gate Accessibility: Warehouses and cold storages to be declared sub-market yards.
At least one private market per revenue division to be introduced.
Grameen Haat Development: Annually, 300 Grameen Haats to be developed into GrAMs, with 50 in hilly/North-Eastern regions.
Futures Trade Integration: DA&FW to work with SEBI to integrate more Farmer Producer Organizations (FPOs) with futures platforms.
e-NAM Integration: APMC markets and private markets to be linked to the e-NAM platform.

2. Agri-Value Chain and Marketing Infrastructure:

Establish Infrastructure Gap Analysis Committees (IGACs) at the district level.
Constitute state-level IGACs to oversee the process of gap analysis.

3. APMC Reforms:

Dedicated spaces within APMC markets for organic and natural farming produce.
APMCs should evolve beyond regulatory enforcement and fee collection to offer value-added services.
Infrastructure development in PPP mode.

4. Export-Oriented APMCs:

States to identify potential APMCs for export-oriented development.
Dept. of Agriculture to provide technical and financial support.

5. Professional management of APMCs:

Appointing qualified secretaries for APMCs, with expertise in agri-value chain services.

6. Digitisation and Ease of Doing Agri-Trade:

Collaborate with state governments to digitize processes across all states/UTs.
Reducing turnaround time and delays in the supply chain.
Indexing for Ease of Doing Agri-Trade (sharing regular updates with states)

7. Robust Market Information & Intelligence System:

Develop Digital Public Infrastructure (DPI) on federated model in the name of “Market-Stack Or Unified National Market Portal (UNMP)” on the lines of Agri-Stack.
Market Information Registry: capturing accurate and real time data at states’ level with respect to prices and arrivals.

8. Market/Price- Risk Mitigating Measures:

Contract Farming as Tools for Market and Price Risk Mitigation.
Market linkage through FPOs.
Price Insurance Scheme on the lines of PM- Fasal Bima Yojana (PMFBY).

9. Marketing System for North-Eastern and Hilly Region:

Create market ecosystems tailored to local needs while supporting regional, national, and international value chains.
Emphasise branding, packaging, quality testing, certification, and organic/natural produce marketing.
Focus on fruits, vegetables, spices, medicinal plants, and black scented rice.
Branding as organic produce for domestic and international markets.

10. Marketing System for States/ UTs with No APMC Acts:

DA&FW to collaborate with states/UTs to identify and strengthen potential non-regulated wholesale markets and grameen haats.
Integrate upgraded markets with eNAM.

11. Capacity Building:

Market Committees to undertake awareness programmes among the farmers.
Prepare strategic training programmes for marketing personnel and marketing functionaries.

Concerns raised about the Draft Policy:

Impact on federalism: Implementation of new draft policy might erode the power of states to regulate agri-marketing within their state.
Endanger farmers: Farmers might not have bargaining power with private storage infrastructures during price volatility.
Uniformity affects diversity: neglects the different aspirations of farmers in different states.
Ignoring price assurances: Lack of provision for minimum support prices or to support farmers during distress sale.

Assam Semiconductor Plant to start making Chips in 2026

Context: The semiconductor plant being constructed by Tata Electronics in Assam would begin production of “Made In India” semiconductor chips in 2026.

Relevance of the topic:

Prelims: Question on uses and applications of semiconductors.

Mains: Analytical questions on challenges and potential of the Indian semiconductor sector.

Major Highlights

The semiconductor plant being constructed by Tata Electronics in Assam will be completed in 2025, and will begin production of the chips in 2026.
It will be India’s largest semiconductor plant (spread across 220 acres).
The plant is expected to produce up to 48 million semiconductor chips per day, employing advanced packaging technologies like flip chip and Integrated System in Package (ISIP).
The chips will be used in automobile and telecom industries. They will be supplied to various countries including Japan, the United States, and Germany.
Note: Additionally, Tata Electronics is setting up two semiconductor fabrication units in Gujarat, with the first expected to be operational by 2026.

Significance:

Significant step towards reducing India’s dependence on imported semiconductors.
Create future-ready industry in the North-Eastern states & is a part of the vision of developing the states as the ‘Ashta Lakshmi’ States.
Provide direct & indirect employment in the state. An electronic city is being constructed for providing residential facilities to about 40,000 employees.

About Semiconductor Sector in India

India relies heavily on imports of semiconductor chips.
- India's semiconductor imports reached approximately ₹1.71 lakh crore (about USD 20.7 billion) in the fiscal year 2023-24.
- India imports the majority of semiconductors from Taiwan and China.
The Indian government has launched various initiatives to give a boost to semiconductor manufacturing in India.
- Production Linked Incentive (PLI) to attract the foreign semiconductor manufacturers like Taiwan Semiconductor Manufacturing company (TSMC) and Foxconn.
- Silicon corridor: India has developed the silicon corridor for preferred destinations of semiconductor manufacturing i.e., Gujarat, Karnataka and Tamil Nadu.
- Semicon India program to develop the semiconductor sector especially in the display domain.

Challenges to Semiconductor Sector in India:

High capital requirement- A semiconductor plant requires capital of more than $10 billion and has a long gestation period.
Technological lags: India lags behind the sophisticated technologies to fabricate the semiconductor nodes like 3nm and 5nm.
Supply chain deficiency: India lacks the silicon deposits and depends on imports for silicon, leading to a constraint in raw material availability.
Competition from global players: India faces a cut-throat competition from the established players like Taiwan, South Korea and USA.
Limited Fabrication expertise: India lacks the skilled labour force and experts who have good experience in the semiconductor fabrication methods.

Opportunities for the Indian Semiconductor Sector

Geo-political shifts: Tensions between China on Taiwan opens up an opportunity for India to boost its semiconductor sector by inviting companies like Foxconn under ‘China plus one strategy’.
Rising global demand: With the 5G and Internet of Things (IoT), the demand for semiconductors is rising in the world.
Government initiatives: Schemes like PLI and subsidised facilities to semiconductor companies create an opportunity for a boost in the sector. E.g., Vedanta-Foxconn facility.

Suggestive Measures

Compatible infrastructure: India should focus on creation of a compatible infrastructure for the semiconductor sector. Example- Separate Silicon manufacturing hub like Taiwan.
Upskilling labour: Launching dedicated courses and training programmes in colleges to master the fabrication of semiconductors
Global partnerships: India should focus on bringing nations like the USA and EU to promote chip manufacturing in India under the ‘China Plus One’ program.

About Semiconductor Chips

Semiconductor Chips are essential components used in almost all modern electronic devices, enabling them to process data, control functions, and power operations.
Made primarily from materials like Silicon, these chips are integral to technologies such as smartphones, computers, cars, medical devices, and industrial machinery.
Following are the steps of manufacturing of semiconductors:
- Designing of the semiconductor chips based on the requirements.
- Fabrication i.e., a complex process of creating circuits and nodes on the silicon wafer.
- Testing and Packaging: Ensuring quality and packaging to supply chips to industries like automobile and telecommunications.

Conclusion: To boost India's semiconductor sector, it is crucial to enhance infrastructure, invest in R&D, and build skilled workforce capabilities. Strengthening supply chains, fostering global partnerships, and leveraging government schemes like PLI will create a robust ecosystem. Strategic investments in advanced manufacturing technologies and sustainable practices will drive long-term growth.