Odisha Cabinet Expands Semiconductor Policy to Attract Wider Investments

Bhubaneswar: The Odisha government has widened the scope of its semiconductor policy to cover more segments of the industry, including equipment, specialty chemicals, advanced materials and other critical inputs, with the aim of building an integrated semiconductor ecosystem in the state.

The State Cabinet has approved the third amendment to the Odisha Semiconductor Manufacturing and Fabless Policy, 2023, aligning the framework with the evolving priorities of the India Semiconductor Mission (ISM) 2.0 and incorporating feedback from industry stakeholders.

The policy was first notified in September 2023 and subsequently amended in March 2024 and July 2025. So far, proposals from five companies have been approved under the policy, including two projects that have received support under the India Semiconductor Mission.

With the latest amendment, incentive support will now extend beyond semiconductor manufacturing, ATMP/OSAT, display manufacturing and fabless design. The expanded framework will also cover semiconductor equipment manufacturing, semiconductor-grade chemicals, specialty gases, advanced materials and other components of the semiconductor supply chain.

A key provision of the amended policy is additional fiscal support from the Odisha government. For projects approved by the India Semiconductor Mission, the state will provide fiscal assistance equivalent to 25 per cent of the eligible capital expenditure.

The state assistance will be released on a pari passu basis with the financial support provided by the Centre under the ISM. Disbursement will be linked to project milestones and corresponding releases approved under the central semiconductor programme.

The amended policy also provides for customised incentive packages for mega projects in areas such as semiconductor equipment, input supply chains and raw materials. Such packages will be considered on a case-by-case basis and will require State Cabinet approval based on the recommendation of a high-level committee headed by the Chief Secretary.

The government expects the broader incentive framework to attract investments across manufacturing, advanced materials, logistics and ancillary sectors. The expansion is also expected to generate direct and indirect employment, strengthen skill development and create new opportunities for MSMEs supporting the semiconductor industry.

Officials said the latest amendment marks a shift from a project-focused approach towards developing a more integrated semiconductor ecosystem in Odisha. The expanded framework seeks to bring together manufacturing units, suppliers of critical materials and equipment, logistics providers and other supporting infrastructure.

The move is expected to strengthen Odisha’s position as an investment destination for high-technology industries while improving investor confidence and encouraging greater participation in the semiconductor value chain.

The government also expects the policy to contribute to the broader Atmanirbhar Bharat objective by encouraging domestic manufacturing, reducing dependence on imports and creating high-value employment opportunities in semiconductor manufacturing and related sectors.