Odisha cabinet amends semiconductor policy to boost investment in electronics manufacturing

The 74th session of the Cabinet Meeting convened on Thursday at the Lok Seva Bhawan in Bhubaneswar, Odisha, under the leadership of Chief Minister Naveen Patnaik, centered on amending the Odisha Semiconductor Manufacturing and Fabless Policy-2023 to enhance investor attraction for establishing semiconductor and electronic chip manufacturing facilities, as well as fabless design units, within the state.

In pursuit of the vision, the Government of Odisha had introduced the Odisha Semiconductor Manufacturing and Fabless Policy-2023 in September 2023.

The amendments focus on bolstering fiscal support mechanisms, including interest subvention, Production Linked Incentives (PLI), and investments in R&D and skill development training.

Under the revised provisions, mega projects exceeding Rs 500 crore in investment will now have easier access to an upper limit of Rs 25 crore per annum for a period of 7 years towards interest subsidy.

The previous 5 per cent cap for interest subvention has been eliminated to facilitate larger investments in semiconductor manufacturing.

Furthermore, mega projects will be entitled to reimbursement of R&D expenditures up to Rs 2 crore annually for a period of 10 years.

Additionally, all units are eligible to apply for the Production Linked Incentives (PLI) incentive for a continuous period of 5 years within the 7-year period following the commencement of production.

In terms of skill development, eligible units will receive reimbursement of up to Rs 2 crore per annum for 5 years to facilitate the training of their employees engaged in core operations.

The policy aims to create an ecosystem conducive to semiconductor research and development (R&D), design, and manufacturing firms while nurturing a talented workforce in semiconductor design.

However, despite the initial strides, the semiconductor industry in Odisha is still in its nascent stages.

To address the evolving needs of potential investors and strengthen the competitiveness of the state’s semiconductor ecosystem, amendments to the policy have been proposed.

As a key industrial hub, Odisha is embarking on a transformative journey to become a leading destination for semiconductor design and manufacturing.

These measures aim to enhance the competitiveness of Odisha’s semiconductor ecosystem and attract significant investments in electronics manufacturing, ultimately driving economic growth and employment opportunities in the state.