India's southern state of Tamil Nadu unveiled a policy to promote chipmaking and IC design industries to develop the region as India's electronics and semiconductor powerhouse, as the state is competing with Gujarat to build India's first semiconductor ecosystem.
According to Indian Express, The Republic, and Fincnail Express, during a two-day Global Investors Meet held in Chennai over the weekend, the state launched the Tamil Nadu Semiconductor and Advanced Electronics Policy 2024, intending to raise the state's contribution to India's electronics exports from 30% at present to 40% by 2030, and developing a skilled workforce of 200,000 individuals in the sector.
MK Stalin, Chief Minister of Tamil Nadu, said the aim is to have inclusive growth across the state and prepare youngsters to meet the needs of the industries. The state is one of the most preferred and most welcomed destinations in attracting investment.
Tamil Nadu is the second state in India after Gujarat to launch a dedicated semiconductor policy. According to the scheme, semiconductor projects that had won approval and a 50% subsidy under the INR760 billion semiconductor policy offered by India's central government will be provided with an additional 50% subsidy of the expenditure incurred for the project during the investment period, for in-house R&D about geographical indications registration patents.
Additionally, a 5% interest subvention will be offered to reduce the interest rate for the actual term loans used to fund the project. There will be a 100% stamp duty exemption for leasing or purchasing land, sheds, or buildings for industrial purposes on land owned by the State Industries Promotion Corporation of Tamil Nadu Limited. A stamp duty concession for private land will be granted as a 100% back-ended subsidy for up to 50 acres, contingent upon meeting investment and employment commitments.
Furthermore, new or expanded projects will benefit from a five-year exemption on electricity tax for power sourced from the Tamil Nadu Generation and Distribution Corporation or generated and consumed from captive sources.
On the other hand, prominent research or design firms in the chip and electronics sector could qualify for a payroll reimbursement of up to 30% for three years, provided they employ residents of the state.
Meanwhile, Gujarat became the first in India to launch a dedicated semiconductor policy and planned to build a "Semicon city" at the Dholera Special Investment Region (Dholera SIR). Gujarat offered additional capital assistance at 40% of the capital expenditure assistance extended by India's central government, as well as a 75% subsidy on procurement of the first 200 acres of land in the Dholera SIR, while additional land for upstream or downstream projects will get 50% subsidy on land cost. Gujarat also offers a one-time reimbursement of 100% stamp duty and registration fees, a fixed water tariff of INR12 per cubic meter for five years, a capital subsidy of 50% for desalination plants, and an electricity subsidy of INR2 per unit.
