Odisha Cabinet Approves Amendments to Semiconductor Policy for Enhanced Investor Appeal

Bhubaneswar: In a bid to fortify its position as a leading industrial hub, the Odisha Cabinet, under the leadership of Chief Minister Naveen Patnaik, has given the green light to amendments proposed for the Odisha Semiconductor Manufacturing and Fabless Policy 2023. The primary objective behind these amendments is to attract significant investments for the establishment of semiconductor manufacturing units, electronic chip production, and the fabless design of these products within the state.

Recognizing the transformative potential of the semiconductor sector, Odisha envisions becoming a central hub for semiconductor design and manufacturing. The Odisha Semiconductor Manufacturing and Fabless Policy-2023, introduced in September 2021, lay the groundwork for fostering a robust ecosystem that includes a startup hub for semiconductor research and development, design, and manufacturing firms. The policy also aims to nurture the pool of semiconductor design talent within the nation.

Despite the initial strides, the semiconductor industry in Odisha is still in its nascent stages. Acknowledging the dynamic nature of the competitive landscape and the evolving needs of potential investors, amendments to the policy have been deemed necessary. These changes aim to strengthen provisions for fiscal support, specifically under interest subvention, Production Linked Incentives (PLI), and investments in research and development (R&D) and skill development training.

Key amendments include the removal of the previous 5% capping for interest subvention, allowing mega projects exceeding INR 500 crore in investment to access an upper limit of INR 25 crore per annum for a period of 7 years.

Moreover, mega projects can now claim reimbursement of up to INR 2 crore annually for 10 years towards R&D expenditures.

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

Skill development initiatives will also receive a boost, with eligible units entitled to reimbursement of up to INR 2 crore per annum for 5 years to facilitate the training of employees engaged in core operations. These amendments aim to create a conducive environment that not only attracts investments but also nurtures the growth of the semiconductor industry in Odisha.