In a strategic move to fortify its position as a global hub for semiconductor and advanced electronics manufacturing, Tamil Nadu introduced the groundbreaking Tamil Nadu Semiconductor and Advanced Electronics Policy 2024 during the ongoing Tamil Nadu Global Investors Meet (GIM) 2024. The policy pledges significant financial incentives and support mechanisms aimed at attracting and nurturing semiconductor projects within the state.
Under this trailblazing policy unveiled on January 7, the state government has announced a substantial top-up of up to 50 percent in financial incentives for semiconductor projects chosen under the Centre’s $10 billion chip subsidy initiative. Projects establishing their manufacturing base in Tamil Nadu will be entitled to enhanced incentives encompassing financial support for training personnel, stamp duty waivers, land concessions, and electricity benefits.
Global research and design entities focusing on chips and electronics are slated to benefit from a generous payroll reimbursement of up to 30 percent for three years, provided they employ residents of the state. The subsidy, capped at Rs 20,000 per employee monthly, seeks to stimulate local employment and skill development.
Furthermore, the policy outlines comprehensive reimbursements, including 50 percent of R&D expenditure, capped at Rs 1 crore, related to patents, copyrights, trademarks, and geographical indications registration. To bolster project financing, an interest subvention of 5 percent on actual term loans has been proposed.
The ‘Structured Package of Incentives for Advanced Electronics Manufacturing’ is designed to attract ‘new/expansion projects’ commencing investment from January 1, 2024. Companies aspiring to benefit from these incentives must meet a minimum investment threshold of Rs 200 crore and create a minimum of 150 jobs for the initial investment. Additional investments of Rs 50 crore should generate a minimum of 35 jobs. The units must achieve these benchmarks within a standard investment period of four years, ensuring a minimum of 20 percent in-house/unit-level value addition from their manufacturing facilities.
The announcement coincided with the unveiling of major investment commitments by industrial giants during the summit. Tata Electronics declared a whopping Rs 12,082 crore investment for an enclosure manufacturing and mobile phone assembly unit in Krishnagiri District, projecting a massive employment opportunity of 40,500 jobs.
Qualcomm inaugurated its new design centre, a testament to Tamil Nadu’s allure, with an investment of Rs 177.27 crore, promising employment for 1,600 individuals. Additionally, Apple supplier Pegatron announced a Rs 1,000 crore investment in Chengalpettu for computing, communications, and consumer electronics manufacturing, projecting an employment boost of 8,000 jobs.
The first day of the GIM also witnessed significant MoUs inked, including a Rs 515 crore pact with Godrej Consumer for a project in Chengalpettu, Rs 5,000 crore investment by TVS Group in automobile, realty, and IT, and Rs 200 crore by Mitsubishi Electric in Gummidipundi.
The proactive measures and investment commitments reaffirm Tamil Nadu’s emergence as a formidable investment destination amidst fierce competition from other provinces, setting the stage for an accelerated semiconductor and electronics manufacturing revolution in the region.
