Guidelines for Modified Scheme for Setting Up of Semiconductor Fabs in India

The “Guidelines for Modified Scheme for Setting Up of Semiconductor Fabs in India” dated 29th May 2023, outlines the policies and procedures for supporting the establishment of semiconductor fabrication plants in India. This modified scheme, which extends fiscal support of 50% of the project cost, aims to bolster the country’s semiconductor manufacturing capabilities. Here is a summary of the key points:

Background

  • Notification and Modification: The scheme is a modified version of the earlier scheme notified on 21st December 2021, with the new notification dated 4th October 2022.
  • Fiscal Support: It provides 50% fiscal support for the project cost on a pari-passu basis, contingent on meeting capital expenditure thresholds.
  • Application Period: Applications will be accepted from 1st June 2023 and will remain open until further notice.

Scheme Guidelines

  1. Definitions:
    • Modified Scheme: Extends fiscal support of 50% of project costs.
    • Applicant: Legal entities like Private Limited or Public Limited Companies.
    • Nodal Agency: India Semiconductor Mission (ISM) under the Ministry of Electronics and Information Technology (MeitY).
  2. Eligibility and Project Cost:
    • Applicants must meet specific criteria related to project investment and capability.
    • Eligible project costs include land, building, machinery, and associated utilities.
  3. Nodal Agency’s Role:
    • ISM will manage application processes, evaluate project proposals, and oversee the disbursement of funds.
    • ISM will also ensure compliance with the scheme’s guidelines and report progress to MeitY.
  4. Application and Approval:
    • Applications must be submitted in a prescribed format with required documentation.
    • The Nodal Agency will evaluate applications based on technological and financial criteria.
    • Multiple applications from a single applicant are allowed.
  5. Disbursement and Compliance:
    • Fiscal support will be disbursed based on project milestones and compliance with the scheme’s terms.
    • The Nodal Agency will submit budgetary requirements to MeitY for fund allocation.
  6. Other Support:
    • Includes assistance with obtaining necessary licenses, permits, and clearances for project execution.

Additional Provisions

  • Market and Technology Assessment: Applicants must provide detailed plans for market assessment, technology upgrades, and R&D collaborations.
  • Human Resources and Capital Goods: Plans for training, skill development, and procurement of new or refurbished capital goods must be detailed.
  • Regulatory Compliance: Applicants need to outline the regulatory requirements and timelines for obtaining necessary approvals.

This scheme is designed to attract significant investments in India’s semiconductor sector by providing substantial fiscal support and creating a conducive environment for establishing and expanding semiconductor fabs in the country .

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