Electronics and Semiconductors have emerged as critical elements of economic growth and strategic security for any country. While India steadfastly marches towards the USD 5 Trillion economy aptly supported by USD 1 Trillion Digital economy, it is imperative that India develops a self-reliant and sustainable electronics and semiconductor ecosystem within the country.
In recent years, the ICT and Electronics sector has experienced significant growth, largely driven by escalating demand from emerging market economies. A noteworthy shift in manufacturing locales has also been observed, with a move away from Europe and North America towards Asia. Presently, China is the predominant global destination for ESDM, with its electronics production accounting for nearly 40% of global output and 30% of global electronics exports. Furthermore, Southeast Asia, particularly Vietnam, and Indonesia, has emerged as a prominent global hub for electronics manufacturing. This is attributed to a combination of factors, including lower labor costs, and attractive incentives.
The global electronics market is currently valued at around USD 2 trillion and is expected to grow significantly due to the increasing penetration of emerging technologies such as 5G, IoT, Artificial Intelligence, Robotics, Smart Mobility, and Smart Manufacturing.
Odisha being a prominent industrial state, is embarking upon its journey to attract Semiconductor value chain investments in the state.
At a concessional industrial rate as per IPR 2022
|2||Stamp Duty||100% stamp duty exemption|
|3||Capital Investment Subsidy||
Additional 25% Capex contribution towards the overall project Capex (The Govt of India provides for 50% of the Capex) offered on a ‘pari-pasu’ basis. Applicable to projects approved under the India Semiconductor Mission (ISM).
30% of the overall project capex for companies offered on a pari-pasu basis applicable for firms not going through the ISM route
|4||Electricity Duty & Electrical Inspection Exemption||100% exemption from payment of Electricity Duty & Electrical Inspection for a period of 10 years from the date of commencement of commercial production|
|5||Power Tariff Reimbursement||Reimbursement of Power Tariff of Rs. 2.00 per unit for a period of 10 years from the date of commencement of commercial production|
|6||Interest Subsidy||Interest Subsidy at the rate of 5% per annum up to a maximum limit of INR 25 crores per annum, on term loans availed from Public Financial Institutions / Banks, for a period of 7 years|
|7||Water Supply & Incentives||The rate of water is INR 7.65 / cubic meter for the first 10 years of operation.|
|8||SGST Reimbursement||Reimbursement of 100% of net SGST paid, overall limited to 200% of the cost of plant and machinery, provided that the SGST reimbursement shall be applicable only to the net tax paid towards the state component of GST, after the adjustment of input tax credit against output tax liability|
|9||Raw Materials||Provide 10% capex incentives in addition to the Govt of India’s 25% incentives for raw materials & supply chain products under the SPECS scheme of Govt of India|
|11||Patent Registration||The cost of filing successful patents shall be reimbursed up to INR 5 Lakhs for domestic and INR 10 Lakhs for international patents, on actual basis (75% given when patent is filed, 25% when it is granted)|
|12||Manufacturing Incentives in addition to PLI||Units can avail Production Linked Incentive (PLI) @1% of Net Sales Turnover (Gross Sales Turnover – Credit Notes (raised for any purpose) – Discounts (including but not limited to cash, volume, turnover, target, or for any other purpose) – applicable taxes) starting from the year of commencement of production, for 5 years subject to eligibility conditions to be notified later (as per MEiTY)|
|13||Semiconductor Trained Manpower & Skilling||
Support undergraduate program in Electronics and VLSI Design in 25 Institutes.