Odisha’s New Policy Boosts Semiconductor Sector with Attractive Incentives
– Additional Subsidies for Semiconductor Manufacturing Companies under India Semiconductor Mission (ISM)
– Financial Benefits for Fabless Design Companies
In a significant move to establish itself as a prominent player in India’s semiconductor industry, the Odisha government has introduced a new policy offering a bouquet of incentives to entrepreneurs and investors in the sector. This initiative makes Odisha the third state in the country, after Gujarat and Uttar Pradesh, to have a dedicated policy for the semiconductor domain. The Odisha Semiconductor Manufacturing and Fables Policy, 2023, covers both semiconductor manufacturing companies coming through the India Semiconductor Mission (ISM) and those directly investing in the state, making it more advantageous compared to the policies of other states.
Additional Subsidies for Investors:
– Companies coming through ISM will receive an additional 50 percent subsidy, on top of the subsidy on fixed capital investment (FCI) provided by the Central government.
– Non-ISM category units will be eligible for 30 percent of FCI based on the project cost.
Land, Power, and Water Tariff Incentives:
– The first five mega projects with investments exceeding Rs 5,000 crore will receive an extra 25 percent subsidy on land rates, as per the Industrial Policy Resolution (IPR).
– All mega projects will be offered a 10 percent additional subsidy on IPR land rates for the first 200 acres of land dedicated to their projects.
– Water supply at project sites will be available at an affordable rate of Rs 7.65 per cubic meter.
– Power supply will be provided at Rs 2 per unit for ten years, with full exemption from electricity duty and inspection charges.
State GST Reimbursement and Production-Linked Incentives:
– Units will receive state GST reimbursement up to 100 percent of FCI.
– Production-linked incentives of one percent on net sales turnover will be provided for five years.
Fabless Design Companies Incentives:
– Fabless design companies, not covered under the Centre’s design-linked incentives (DLI) scheme, will be incentivized by the Odisha government.
– Incentives include 10 percent of the development cost as seed money and reimbursement of 10 percent of the development cost upon achieving milestones.
– The cap for each project or company is Rs 20 crore, with Rs 7.5 crore allocated for proof of concept (PoC) and Rs 12.5 crore for productization.
– The policy proposes an additional grant of Rs 10 crore for the first five mega projects focusing on system-on-chip, application-specific integrated circuit, or processor-class products registered by Odisha-based companies.
Capex Incentives for Electronic Components and Semiconductors:
– The state government will provide 10 percent capex incentives in addition to the Centre’s 25 percent incentives for raw materials and supply chain products, promoting the manufacturing of electronic components and semiconductors.
Employment Generation:
– The new policy aims to create around 5,000 direct jobs and 20,000 indirect jobs during its seven-year period.
– It also aims to attract at least one semiconductor manufacturing unit and over 100 fabless design firms to Odisha.
With its comprehensive incentives, Odisha’s semiconductor policy is poised to boost the growth of the sector within the state and contribute significantly to India’s semiconductor industry as a whole.
