Gujarat announces dedicated Semiconductor Policy – 2022-27

In the new policy the state government has decided to give heavy subsidies on power, land and water tariffs for entrepreneurs interested in investing in semiconductors or display fabrication manufacturing in the State.

Gujarat announces dedicated Semiconductor Policy – 2022-27
In addition, the state proposes to develop a special "Semicon City" which would be part of the Dholera Special Investment Region.

The Bhupendra Patel-led Gujarat government on Wednesday announced a dedicated ‘Gujarat Semiconductor Policy 2022-27’ with a view to generate at least 2,00,000 new employment opportunities during a period of five years. In addition, the state proposes to develop a special “Semicon City” which would be part of the Dholera Special Investment Region.

With this, Gujarat has become the first state in the country to have dedicated semiconductor policy. In the new policy the state government has decided to give heavy subsidies on power, land and water tariffs for entrepreneurs interested in investing in semiconductors or display fabrication manufacturing in the state.
According to a state government, the main objective of the policy is to make Gujarat a pioneer in developing the Electronics System Design & Manufacturing (ESDM) ecosystem.

The policy will facilitate effective and timely execution of the eligible projects for setting up a robust semiconductor and display fabrication ecosystem, said a senior official with the state science and technology department. It may be mentioned that the central government has recently announced the India Semiconductor Mission (ISM) and it has already come out with four policies providing support to semiconductor and display fab projects.

The Gujarat policy focuses on guiding a significant portion of investments made under these ISM policies towards Gujarat, said an official closely connected with the formation of the policy. The state government is aiming to develop a ‘Semicon City’ which would be part of Dholera Special Investment Region (DSIR).

Under the policy Gujarat will provide additional capital assistance at 40 % of the capex assistance extended by the Centre for the projects approved under ISM. As per the policy one project each of semiconductor and display fabrication will get support. In case of multiple applications, the State-appointed high-powered committee will make recommendations on the basis of credentials of projects.

The projects approved under the Design-linked Incentive scheme of the Government of India will not be eligible for availing the benefits under the new policy, said the state government press release. Eligible projects will get 75% subsidy on procurement of first 200 acres of land in the SIR, while additional land for upstream or downstream projects will get 50 % subsidy on land cost. Moreover, one-time reimbursement of 100% stamp-duty and registration fees paid to the government, fixed water tariff at Rs 12 per cubic meter for five years and a capital subsidy of 50% for desalination plants are the fiscal benefits under the new policy. Under the policy, the approved project will get an electric subsidy of 2 per unit.

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