New Delhi: The government has notified the much-awaited semiconductor policy providing capital subsidy to investors setting up chip manufacturing units in India.
The government expects to attract an investment of Rs24,000 crore in the next three years. The country is likely to have two-three fab units at an investment of $2-3 billion each by 2010, Minister for IT and Communications Dayanidhi Maran told reporters here.
“An appraisal committee to be headed by the Additional Secretary in the Department of IT will be formed very soon. The committee will receive expressions of interest from interested parties and will submit its recommendations to the government,” he said.
Maran said now that the policy has been notified, he will reopen negotiations with Intel and other companies to explore possibilities of their setting up units in the country.
Intel, the world’s largest chip manufacturer, had been waiting for the semiconductor policy to take decisions on its India plans and had in the meantime selected Vietnam for a facility.
The Union Cabinet had earlier approved the policy. The subsidy will be in the form of tax breaks and interest-free loans. The incentives will be 20% of the capital expenditure during the first 10 years, but companies have to invest a minimum Rs2,500 crore. Such units will have to be set up in special economic zones to avail this benefit.
If the unit is located outside an SEZ, the incentive would be 25% of the capital subsidy in the first 10 years and countervailing duty on capital goods would be exempted.
The threshold investment limit for manufacturing other products like storage devices, micro and nanotechnology products, assembly and testing of all these products and organic light emitting diodes is Rs1,000 crore.
India got its first proposal to start such a unit from a group of companies, including Advanced Micro Devices and SemiIndia, for an investment consideration of $3 billion (Rs13,000 crore) in 2005.
The incentives will be for the manufacture of all semiconductors, displays including liquid crystal displays, plasma displays as well as other such panels including solar cells and photvoltaics.