The Uttar Pradesh government has announced a massive subsidy and exemption programme for semiconductor investors under the newly ratified UP Semiconductor Policy 2024. All the incentives in the scheme would be over and above the ones offered by the Centre under its Modified Programme for Semiconductors and Display Fab Ecosystem.
Under this policy, investors stand to benefit from a 5% per annum interest subsidy on loans obtained from scheduled banks or financial institutions, with a maximum repayment period of seven years, according to a press release.
Those investing up to ₹200 crores can avail themselves of this incentive, with units investing up to ₹7 crores also eligible for the interest subsidy. Stamp duty and registration fees on land transactions will be entirely waived, offering investors a significant financial reprieve.
The state has also pledged to exempt investors from electricity duty for a decade, along with providing double power grid networks for semiconductor fabrication units. Moreover, a 50% discount on wheeling charges or transmission charges for interstate electricity purchases will be extended for 25 years from the operational date of the project.
Highlighting the salient features of the policy, Uttar Pradesh's Minister of Higher Education, Yogendra Upadhyay, highlighted its pivotal role in propelling both the state and the nation to the forefront of the semiconductor sector.
Notably, the subsidies encompass a 50% capital subsidy sanctioned by the central government and a 75% subsidy on land purchases, based on prevailing sector rates, for up to 200 acres.
Complementing the subsidy package is a robust focus on
skill development and training initiatives, aimed at cultivating a skilled workforce adept in chip design and manufacturing for which up to
₹3 crores will be allocated for five years, wherein up to
₹60 lakhs per year will be used for organising faculty training, technical workshops, awareness programmes, and expert lectures.
The government will also provide annual financial assistance of ₹20,000 for up to 500 students each for five years under the Chief Minister Internship Scheme. The focus of this will be on B.Tech and M.Tech graduates.
"To foster the development of international-level expertise within the semiconductor industry, a maximum sum of ₹1 crore per unit will be provided as one-time assistance for a period of up to 12 months as compensation for such expertise," the release added.
Additionally, the policy encompasses provisions for establishing research and development (R&D) centres and Centres of Excellence (COEs), with substantial subsidies allocated for their setup. Units investing in R&D centres stand to receive up to ₹10 crore in subsidies, subject to fulfilling certain conditions, while the establishment of a COE will benefit from 50% of the total project cost, capped at ₹10 crore.
In further support of the semiconductor industry, the government has also earmarked funds for patent registration reimbursements and infrastructure development, further solidifying its position as a champion of technological advancement and industrial expansion in the region.
(Edited by : Ajay Vaishnav)
