State Cabinet Approves Amendment of Odisha Semiconductor Manufacturing and Fabless Policy-2023 to Attract Investment

Bhubaneswar: The Odisha Cabinet chaired by Chief Minister Naveen Patnaik approved a proposal for amendment of the Odisha Semiconductor Manufacturing and Fabless Policy 2023 to attract investors for setting up manufacturing of semiconductor, electronic chips and fabless design of these products in the State.

Odisha, as a prominent industrial state, is embarking on a transformative journey to attract investments across the semiconductor value chain, a burgeoning sunrise sector.

The vision is to establish Odisha as a nucleus for semiconductor design and manufacturing. To achieve this goal, the Government of Odisha introduced the Odisha Semiconductor Manufacturing and Fabless Policy-2023 in September 2021.

This policy aims to foster a thriving ecosystem by establishing a startup hub for semiconductor R&D, design and manufacturing firms and also, nurturing the nation’s pool of semiconductor design talent.

However, the semiconductor industry in Odisha is still in its infancy. Recognizing the dynamic nature of the competitive landscape and the evolving demands of potential investors, certain amendments to the policy have been deemed necessary. These-amendments are designed to bolster provisions for fiscal support under interest subvention, Production Linked Incentives (PLI), and investments in R&D and skill development training.

Under the revised provisions, mega projects exceeding INR 500 Cr in investment can now effortlessly access an upper limit of INR 25 Cr per annum for a span of 7 years towards interest subsidy, as the previous 5% capping for interest subvention has been eliminated.

Additionally, such mega projects are entitled to reimbursement of R&D expenditures up to INR 2 Cr annually for 10 years.

As for the Production Linked Incentive (PLI), all units are now eligible to apply for the 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 INR 2 Cr per annum for 5 years to facilitate the training of their employees engaged in core operations.