Madhya Pradesh Semiconductor Policy: Incentives & Subsidies

Bhopal, Feb 5 (PTI) Madhya Pradesh government has approved a new semiconductor policy that combines fiscal and other incentives to promote design and manufacturing of chips in the state.

The State Cabinet on Tuesday approved the Madhya Pradesh Semiconductor Policy 2025 that gives capital and interest subsidy as well as land at concessional rates and subsidised electricity for fab units and design facilities and other semiconductor manufacturing units, officials said.

With increasing demand for semiconductor components across various sectors such as electronics, automobiles, and information technology, Madhya Pradesh is focusing on creating a conducive environment to attract investment, promote innovation, and build a robust semiconductor ecosystem.

The state is offering capital investment subsidies (up to 25 per cent of investment or 50 per cent of the subsidy provided by the government of India, whichever is lower) for eligible projects. For non-government-approved projects, companies could get a 40 per cent capital investment subsidy with a cap of Rs 150 crore.

The policy also provides 6 per cent interest subsidies or the prevailing applicable interest rate, whichever is lower, for up to 5 years with a total cap of Rs 10 crore.

Land at concessional rates will be provided, they said adding for the first 10 years, companies in the semiconductor sector can avail of a power tariff subsidy of Rs 2 per unit to reduce operational costs and make investments more attractive.

Besides, projects with over Rs 400 crore will be considered for customized incentive packages that could include additional support for infrastructure, tax rebates, and other forms of financial aid.

The policy promotes public-private partnerships and encourages collaboration between government bodies, academic institutions, and the private sector. It also favours Foreign Direct Investment (FDI) and international collaborations to bring global expertise and technology to Madhya Pradesh.

Companies will be encouraged to invest in R&D and technological innovations, they said adding financial aid for research in semiconductor technologies will be provided through special funds and programmes.

Madhya Pradesh provides a simplified regulatory framework to streamline the approval process for new projects. The state government is committed to minimizing delays and making it easier for companies to set up and expand their operations in the state.