At a time when the government is focusing on developing a semiconductor ecosystem in the country, four state governments – Gujarat, Odisha, Tamil Nadu, and Uttar Pradesh – have rolled out specific semiconductor policies.
These state governments are offering a fiscal support of 20-30% to the companies, along with other incentives for setting up semiconductor plants in their respective states, over and above the 50% fiscal support from the Central government, according to a report by India Electronics and Semiconductor Association (IESA).
Gujarat, which so far has witnessed semiconductor project announcement from Micron and Tata group, is offering a 20% capital subsidy of the overall project cost.
On the other hand, Uttar Pradesh, which has also witnessed announcement from Hiranandani group for compound semiconductor unit, is offering a 25% fiscal support to the companies looking to set up chip units in the state. Odisha and Tamil Nadu, are offering to bear up to 30%, and 25% of the project cost, respectively, for the semiconductor projects in their states.
Under the Rs 76,000 crore India Semiconductor Mission, the government is currently evaluating two semiconductor fabrication proposals, four outsourced semiconductor assembly and test (OSAT) proposals and three proposals for compound fabrication.
While four states have come up with a specialised semiconductor policy, eight state governments have come up with a clear mention of catering to semiconductor industry, the IESA report said.
States such as Haryana, Chhattisgarh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, among others, have been offering land subsidies for mega electronic and semiconductor projects. For instance, majority of the states are offering 100% stamp duty exemptions, while some are also offering to bear part of the project costs.
Specifically on semiconductor projects, Telangana and Andhra Pradesh are offering 20-25% of fiscal support up to Rs 30 crore to the companies. On the other hand, Karnataka is also ready to bear 20% of the eligible capital expenditure on plant and machinery, while Maharashtra is offering a 25% capital subsidy.
Among other things, states are providing power tariff subsidy as well as water tariff subsidy for semiconductor projects, according to the report.