Uttar Pradesh Semiconductor Policy 2024: A Detailed Overview
The Uttar Pradesh Semiconductor Policy-2024 is a strategic initiative aimed at making the state a leading global hub for semiconductor manufacturing. This policy is part of India’s broader vision to strengthen its position in the semiconductor industry, which is critical to modern technology.
1. Capital and Interest Subsidies
To attract investments, the policy offers:
- 50% Capital Subsidy: An additional 50% capital subsidy on top of what is already provided by the Government of India. This significantly reduces the upfront capital expenditure for companies.
- 5% Interest Subsidy: For units with investments up to ₹200 crore, the state offers a 5% interest subsidy per annum, with a cap of ₹1 crore per annum per unit for seven years. This aims to ease the financial burden during the initial stages of project setup.
2. Land and Infrastructure Incentives
The policy provides substantial incentives to ease the cost of land and infrastructure:
- Land Rebate: A 75% rebate on the first 200 acres of land and a 30% rebate on additional purchases, specifically targeting ATMP (Assembly, Testing, Marking, and Packaging) and OSAT (Outsourced Semiconductor Assembly and Test) units. This makes land acquisition more affordable for large-scale projects.
- Stamp Duty and Registration Fees: A complete 100% exemption on stamp duty and registration fees for the purchase or lease of land. This further reduces the cost of establishing semiconductor facilities.
- Dual Power Grid Network: Semiconductor fabs will be provided with a dual power grid network to ensure uninterrupted power supply. The cost of one of these grids will be reimbursed by the Department of IT & Electronics, while the investor will bear the cost of the other.
3. Tax Benefits
To make semiconductor projects more financially viable:
- Net SGST Reimbursement: A 100% reimbursement of the Net SGST (State Goods and Services Tax) for 10 years, with an annual ceiling of 10% of the eligible project cost. This reimbursement will be equivalent to the maximum limit of the eligible project cost, providing a significant reduction in operational costs.
4. Operational Support
The policy includes several operational incentives:
- Electricity Duty Exemption: A 100% exemption on electricity duty for 20 years, drastically reducing the operational expenses related to power consumption.
- Transmission and Wheeling Charges: A 50% exemption on wheeling and transmission charges for intrastate power purchases, applicable for 25 years from the project’s commissioning date.
5. R&D and Innovation Support
The policy encourages research and innovation through several initiatives:
- Standalone R&D Centre Support: The government will reimburse 25% of the cost of setting up a standalone R&D center, with a cap of ₹10 crore. This encourages companies to invest in research facilities within the state.
- Center of Excellence (CoE): The policy provides for 50% of the total CoE project cost (up to ₹10 crore) to establish Centers of Excellence in collaboration with academic institutions or industry associations.
6. Skill Development and Employment
To ensure a skilled workforce for the semiconductor industry:
- Training and Internship Support: The state will provide ₹60 lakh annually for five years for faculty training, workshops, and awareness programs. Additionally, up to ₹20,000 will be provided per student for internships, supporting up to 500 students per year for five years.
- Industrial Housing: A 10% cost reimbursement is available for the development of workers’ housing within a 10 km radius of the unit, up to ₹10 crore. This ensures that employees have access to affordable living close to their workplaces.
7. Non-Fiscal Benefits
The policy also includes several non-fiscal benefits to enhance the business environment:
- Water Availability: The state ensures that all semiconductor projects will have access to high-quality potable water, crucial for semiconductor manufacturing processes.
- Power Banking: Power banking for renewable or green energy will be provided, governed by the state’s Electricity Regulatory Commission guidelines.
- Non-Disturbance Provision: A non-disturbance provision ensures assured business continuity, crucial for the long-term stability of operations.
- Three-Shift Operations: The policy allows for 24×7 operations, including the employment of women in all three shifts, with necessary safety and security measures in place.
Conclusion
The Uttar Pradesh Semiconductor Policy-2024 is a comprehensive framework designed to attract large-scale investments and make Uttar Pradesh a leader in semiconductor manufacturing. With substantial financial incentives, operational support, and a focus on R&D and skill development, this policy is set to transform Uttar Pradesh into a global semiconductor hub, contributing to India’s strategic goals in this critical sector. The policy not only aims to boost economic growth but also to position Uttar Pradesh as a key player in the global semiconductor supply chain.