Gujarat Semiconductor Policy 2022–27

The Gujarat Semiconductor Policy 2022–27 is India's first dedicated state policy framework for the semiconductor sector. It is designed to layer state-level capital assistance, land price subsidies, discounted power and water tariffs, and stamp duty exemptions on top of the Government of India's India Semiconductor Mission (ISM) schemes. The policy aims to attract semiconductor & display fabs, compound-semiconductor projects, and ATMP/OSAT facilities to Gujarat by offering ready utilities, streamlined approvals, and prime allocations at Dholera's 'Semicon City'.

Vision

To facilitate investments under the four ISM schemes for developing a Semiconductor and Display fab ecosystem, strengthening the vision of Atmanirbhar Bharat through an Atmanirbhar Gujarat.

Objective

To make Gujarat a pioneer State in developing the Indian ESDM (Electronics System Design & Manufacturing) ecosystem by facilitating effective and timely execution of eligible Semiconductor and Display fab projects, thereby creating employment and boosting socio-economic development.

State Growth Drivers

• •Excellent industrial infrastructure with utility pipelines (power, water, and gas), Inland Container Depots (ICDs), and Container Freight Stations (CFSs).
• •Export-oriented ecosystem with 48 ports (2 major, 46 non-major) and 17 operational airports.
• •Special Investment Regions (SIRs) like Dholera, GIDC estates, and the Mundra Electronics Manufacturing Cluster offering developed land and common effluent treatment plants (CETPs).
• •Abundant availability of skilled manpower with state-of-the-art training and skill-development centres.

Eligible Projects

Companies, consortia, or joint ventures that have applied under one of the central India Semiconductor Mission (ISM) schemes to set up operations in Gujarat:

• •Semiconductor Fabs (Silicon-based)
• •Display Fabs (TFT/AMOLED/Next-gen displays)
• •Compound Semiconductors / Silicon Photonics / Sensors Fabs
• •Assembly, Testing, Marking, and Packaging (ATMP) / OSAT facilities

Key Definitions

• •Eligible Capital Expenditure: Capex/investment on activities described in MeitY implementation guidelines dated 30.12.2021, as amended.
• •Date of Commercial Operations (COD): The date of first production for sale/captive use or first actual sale, whichever is earlier (multi-phase projects use the first phase's COD).
• •High Powered Committee (HPC): Cabinet-level approvals body for Display/Semiconductor Fabs and projects with investments ≥ ₹1,000 Crore.
• •State Level Empowered Committee (SLEC): Approvals body for projects with investments < ₹1,000 Crore.

These State incentives are in addition to central ISM/Government of India incentives. No applicant may double-dip by claiming similar benefits under other Government of Gujarat policies.

A. Capital Assistance

• •State Capital Subsidy: Additional state-level capital assistance at 40% of the capex subsidy sanctioned by the Government of India under ISM.
• •Disbursement: Paid in 5 equal annual instalments, starting from the year subsequent to the year in which the capital investment is made.
• •Initial Cap: Government will initially support one Semiconductor Fab and one Display Fab; subsequent applications will be reviewed on a case-to-case basis by HPC.

B. Land Cost Subsidy & Stamp Duty

C. Potable Water & Power Concessions

• •Potable Water Tariff: Good-quality potable water at ₹12 per cubic meter for the first 5 years from COD, followed by a 10% annual increase for the subsequent 5 years.
• •Desalination Support: 50% capital subsidy on desalination project cost (excluding land), capped at ₹8 Crore per MLD of capacity.
• •Power Tariff Subsidy: ₹2 per unit power tariff concession for 10 years from COD, disbursed in yearly instalments.
• •Electricity Duty Exemption: 100% exemption from electricity duty under the Gujarat Electricity Duty Act, 1958.

Dholera 'Semicon City'

The Government of Gujarat is developing an Industry 4.0-enabled ecosystem at Dholera SIR equipped with common infrastructure including IoT-enabled warehousing, common packaging and marking facilities, and advanced testing laboratories.

Non-Fiscal Support Measures

Compliance Conditions

• •No Double-Dipping: Projects cannot stack benefits from this policy with any other state scheme (excluding GoI central subsidies).
• •DLI Exclusion: Design-Linked Incentive (DLI) scheme applications are excluded (must use the Gujarat IT/ITeS Policy).
• •Agreement Requirement: The eligible capital expenditure computation window begins from the date of the state-level agreement signed between the applicant and the Government of Gujarat.
• •Evaluation Metric: Eligible capital expenditure is computed following the standards established by the central India Semiconductor Mission (ISM).

1. 1ISM Central Application: File proposal under the central India Semiconductor Mission (ISM) scheme for Fab, Compound Semi, or ATMP/OSAT operations.
2. 2Engage GSEM: Register with the Gujarat State Electronics Mission to locate Dholera SIR plots, clear Right of Way, and map utilities.
3. 3Sign State Agreement: Execute the project agreement with the Government of Gujarat to lock in the capex computation window.
4. 4HPC / SLEC Board Evaluation: Projects ≥ ₹1,000 Crore and Fabs undergo evaluation by the High Powered Committee (HPC) chaired by the Chief Secretary. Projects < ₹1,000 Crore are approved by the SLEC.
5. 5DSIRDA Land Allocation: Obtain allotment letters from DSIRDA at Dholera SIR, securing the 75% or 50% land price subsidy.
6. 6Achieve Commercial Operations: Setup the facility and declare COD to trigger water, power, and capital subsidy annual disbursements.