The Hindu Business Line : Special package approved for semiconductor sector

In a move that would attract investments from semiconductor industry, the Union Cabinet on Thursday gave in-principle approval to a special incentive package scheme for setting up semiconductor fabrication and other micro and nano technology manufacture industries in India.

While the Cabinet Secretary will work out details of the incentives, the move will benefit companies such as SemIndia, AMD, Intel and Taiwan-based semiconductor companies who have plans to set up base in India.

"The special incentive package will attract investments to set up semiconductor fabrication facilities and other hi-tech industries in India, to create an ecosystem for the development of electronics/IT hardware manufacturing. These special incentives will be available to companies till March 2010. The threshold limit, incentive package and subsidy will be worked out later by the Prime Minister's Office and the Cabinet Secretary," said Mr Priya Ranjan Dasmunsi, Minister for Information and Broadcasting, while briefing presspersons after the Cabinet meeting. The Finance Minister had announced the Government's intention to come out with a semiconductor policy in Budget 2006.

Industry delighted

The industry expressed happiness over the Government's decision. Ms Poornima Shenoy, President, India Semiconductor Association said, "ISA is delighted at the progressive outlook of the Government in giving an in-principle clearance to the Semicon Policy. This policy should help India to carve out a global position in the semiconductor world over the next few decades, inspite of being a late entrant. We expect this policy to give the semiconductor and electronic manufacturing services industries in India the much needed impetus for growth, leading to a projected contribution of over $202.57 billion to the GDP by 2015."

An ISA study estimates the semiconductor industry to be one of the largest job creators for India by employing over 9.35 million people directly and indirectly.

Mr Vinnie Mehta, Executive Director, Manufacturing Association of Information Technology, said, "This is a step in the right direction. India has been attracting significant investments in the manufacturing segment and the policy will make the country a strong IT manufacturing destination. While we have manufacturing for most parts of IT hardware, we did not have presence in semiconductor manufacturing. This policy will help fill in that gap."