UP Gets Wired: Plugging into the PLI Scheme for Semiconductor Stardom

The Uttar Pradesh government is actively seeking to leverage the Central government's USD 10 billion production-linked incentive (PLI) scheme to propel the growth of semiconductor fabrication within India.

With an ambitious goal of becoming a key player in this sector, the state government anticipates a tenfold surge in domestic semiconductor demand, reaching USD 100 billion by 2025 from the 2020 figure of USD 10 billion. In alignment with this vision, the government has introduced a dedicated policy for chip manufacturing known as the UP Semiconductor Policy 2024, drawing inspiration from similar policies in Gujarat, Odisha, and Tamil Nadu.

Reportedly, more than 12 companies have expressed interest in establishing semiconductor plants within the state. To incentivize such investments, UP Cabinet Minister Yogendra Upadhyay has announced attractive benefits under the new policy. Investors stand to gain a 100 percent stamp duty waiver on land or leasehold registrations, along with a 75 percent land subsidy on 200 acres. For additional land, the subsidy is set at 30 percent.

Companies investing up to Rs 200 crore are eligible for a five percent annual interest subsidy, and there is an additional subsidy of up to Rs 10 crore earmarked for research and development (R&D) initiatives. The implementation of this new policy is expected to attract significant investments, fostering socio-economic growth in the state and generating employment opportunities, particularly for the aspiring youth.

Given India's current reliance on semiconductor imports, the Central government is actively encouraging states to bolster domestic fabrication through the PLI scheme. The overarching objective of the PLI template is to catalyze the entire semiconductor value chain, encompassing design, manufacturing, packaging, and testing of microchips.

News by Rahul Yelligetti