Introduction: MP Semiconductor Policy 2025
The MP Semiconductor Policy 2025 is a strategic initiative by the Government of Madhya Pradesh to position the state as a high-value semiconductor manufacturing and design destination. The policy is structured to reduce capital cost, operational expenditure, and financial risk for semiconductor companies across the value chain.
For investors, fabs, ATMP/OSAT units, and design companies, this policy delivers direct fiscal incentives, infrastructure support, and long-term ROI advantages. However, accurate incentive structuring and professional subsidy execution are critical to fully unlock these benefits.
At Finraja Consultancy Private Limited, we work as specialized semiconductor subsidy consultants, ensuring clients receive maximum eligible incentives with full regulatory compliance.
Overview of MP Semiconductor Incentives
The MP Semiconductor Policy 2025 provides incentives under four core verticals:
- Semiconductor Design & Fabless Units
- Semiconductor & Component Manufacturing Units
- ATMP / OSAT Units
- Talent, Power, Interest & Infrastructure Support
Each incentive is linked to financial milestones, making professional planning essential.
Incentives for Semiconductor Design & Fabless Companies
Incentive Component | Financial Benefit | Policy Basis |
Development Cost Support (DLI Approved) | 10% seed funding + 15% reimbursement | Capped at ₹25 Cr per project |
Development Cost Support (Non-DLI) | 25% reimbursement | Capped at ₹25 Cr |
Milestone-Linked Disbursement | Paid on achieving 50% project milestones | Performance based |
Design companies can recover up to 25% of early-stage R&D expenditure, significantly improving cash flow and reducing funding pressure.
Incentives for Semiconductor Design Services & GCC Expansion Centers
Incentive Type | Financial Support |
Salary Support | 25% of CTC for eligible engineers |
Relocation Assistance | One-time relocation bonus |
EPF Reimbursement | Employer EPF for up to 2 years |
Rental Assistance | As per MP IT & ESDM Policy |
These incentives directly reduce people cost, which forms 40–50% of Opex in design and GCC operations.
Incentives for Semiconductor & Component Manufacturing Units
Projects Approved by Government of India
Incentive | Benefit |
Capital Subsidy | 25% of Eligible Capex |
Disbursement Period | 5 equal annual instalments |
Projects Not Approved by Government of India
Incentive | Benefit |
Capital Subsidy | 40% of Eligible Capex |
Cap Limit | ₹150 Cr |
Disbursement | Over 5 years |
This makes Madhya Pradesh one of the most cost-efficient states for semiconductor manufacturing outside national schemes.
Semiconductor Fab Investment Incentives MP
Fab investments involve high capital intensity and long gestation periods. The policy offsets this through fixed fiscal levers.
Fab Incentive
Incentive | Policy Provision |
Capital Subsidy | As per manufacturing category |
Power Tariff Subsidy | ₹2 per unit for 10 years |
Interest Assistance | Up to ₹10 Crore |
Infrastructure Support | As per IT & ESDM Policy |
These incentives significantly improve long-term cost predictability, which is crucial for fabs.
ATMP and OSAT Incentives in Madhya Pradesh
Incentive Category | Financial Benefit |
Capital Subsidy | Up to 25% of approved project cost |
No Upper Cap (Wafer Units) | Subject to approval |
Land Support | Industrial land at concessional rates |
ATMP and OSAT projects benefit from lower capex thresholds and faster breakeven cycles, making MP highly attractive.
Electricity Duty Exemption for Semiconductor Units MP
Power Incentive | Financial Benefit |
Power Tariff Subsidy | ₹2 per unit |
Duration | First 10 years |
Power Infrastructure | Assured uninterrupted supply |
Power subsidy alone can reduce operational costs by 8–12% annually for fabrication and testing units.
Interest Subsidy & Financial Cost Reduction
Incentive | Details |
Interest Assistance | 6% or actual interest (lower) |
Tenure | Up to 5 years |
Cap | ₹10 Cr cumulative |
This significantly improves project IRR by lowering financing costs during the initial high-debt phase.
Employment Linked Incentives Semiconductor MP
Incentive | Policy Support |
Skilling Reimbursement | ₹50,000 per employee |
Internship Support | ₹10,000/month (6 months) |
EPF Reimbursement | Employer EPF for 2 years (design units) |
Employment incentives reduce workforce ramp-up cost while ensuring long-term talent availability.
Centre of Excellence (CoE) Incentives – Semiconductor & ESDM
Incentive | Benefit |
Capex Support | 25% (Up to ₹25 Cr) |
Opex Support | 25% (Up to ₹5 Cr/year) |
Duration | Up to 5 years |
This supports innovation-led semiconductor ecosystems, especially for advanced packaging and chip design.
MP Semiconductor Policy Eligibility Criteria
Requirement | Condition |
Location | Unit must be in Madhya Pradesh |
Commercial Operations | Incentives post COD |
Land Ownership | Govt or private land eligible |
Approval Authority | Nodal agency & Cabinet Committee |
Incorrect eligibility mapping can lead to claim rejection or delayed disbursement.
Financial Assessment under MP Semiconductor Policy 2025
Instead of assumed ROI ranges, the policy improves financial outcomes through fixed fiscal mechanisms.
Financial Assessment
Financial Lever | Policy Value |
Capital Subsidy | Up to ₹150 Crore |
Interest Assistance | Up to ₹10 Crore |
Power Subsidy | ₹2/unit for 10 years |
Employment Support | Fixed per-employee benefits |
These levers convert capital-heavy semiconductor projects into financially viable investments with improved bankability.
Why Professional Subsidy Consultancy
Semiconductor incentives under this policy are:
- Milestone-linked
- Document-heavy
- Multi-departmental
At Finraja Consultancy Private Limited, we provide:
- Incentive eligibility mapping
- Financial structuring & ROI modelling
- Application drafting & submission
- Liaison with nodal agencies
- End-to-end disbursement support
We ensure clients do not self-apply or risk rejection due to technical errors.
Conclusion
The MP Semiconductor Policy 2025 is one of India’s most financially attractive state semiconductor policies. However, real value lies in structured execution, not just awareness.
For accurate incentive estimation, subsidy planning, and ROI optimization, Finraja Consultancy Private Limited acts as your dedicated semiconductor subsidy partner.
Call us now: +91 9373114747 or visit finraja.com/contact for quick assistance.
