The Indian government has not only given its approval for the fabrication of high-tech semiconductor wafers, but has also extended several incentives to two business consortia – Jaiprakash Associates Limited in association with IBM as its technology partner, and HSMC Technologies India with the technical collaboration of ST Microelectronics who will start manufacturing them.
The incentives are:
- 25 per cent subsidy on capital expenditure and tax reimbursement as admissible under Modified Special Incentive Package Scheme Policy.
- Exemption of Basic Customs Duty for non-covered capital items.
- 200 per cent deduction on expenditure on R&D as admissible under Section 35 (2AB) of the Income Tax Act.
- Investment linked deductions under Section 35AD of the IT Act.
- Interest free loan of approx. Rs. 5124 crore each. (Exact amount to be calculated on appraisal of Detailed Project Report)
As part of its Make in India initiative, designed to attract foreign investment, and increase the availability of jobs, India wants to become a global semiconductor manufacturing hub.
Last updated: December 26th, 2025
