Uttar Pradesh has taken a decisive step to strengthen its position in India’s fast-evolving semiconductor landscape, with the state cabinet approving a comprehensive package of incentives aimed at attracting large-scale semiconductor investments of ₹3,000 crore and above. The move signals the state’s intent to transition from being a manufacturing base for electronics to a full-fledged semiconductor and deep-tech hub.
The newly approved framework is designed to significantly lower both capital and operating costs for investors. It includes long-term interest subsidies, GST exemptions for up to ten years, capped power tariffs of ₹2 per unit for a defined period, concessional water charges, and employee-linked incentives such as reimbursement of EPF contributions for locally employed professionals. Together, these measures aim to improve project viability and encourage long-term commitments from global and domestic semiconductor players.
The cabinet’s decision also aligns with administrative support for Global Capability Centre (GCC) rules, underlining Uttar Pradesh’s broader ambition to attract technology-driven innovation hubs alongside manufacturing facilities.
Aligned with India’s Semiconductor Push
The state’s policy momentum closely mirrors the national thrust under the India Semiconductor Mission (ISM), which offers fiscal support of up to 50% of project costs for eligible semiconductor and display manufacturing units. Uttar Pradesh has already emerged as a key beneficiary of this national push.
Recently, the Union Cabinet cleared a ₹3,700-crore semiconductor manufacturing unit near Noida’s upcoming Jewar International Airport, being set up as a joint venture between HCL and Foxconn. Focused on display driver chips, the project is expected to act as an anchor investment, catalysing further semiconductor manufacturing, design, and supply-chain activity in the region.
State officials point to a strong investment pipeline, with proposals worth over ₹32,000 crore currently under evaluation under the Uttar Pradesh Semiconductor Policy 2024, including commitments from companies such as Tarq Semiconductors and Kaynes Semicon.
From Electronics Hub to Semiconductor Ecosystem
Uttar Pradesh’s semiconductor strategy builds on earlier policy foundations laid through the Electronics Manufacturing Policy 2020, which supported electronics and allied industries through capital subsidies, power incentives, and stamp duty exemptions. The Semiconductor Policy 2024 takes this further, offering targeted support for fabs, compound semiconductors, silicon photonics, sensors, and OSAT/ATMP units, including land rebates of up to 75% and decade-long electricity duty exemptions.
Crucially, the policy also links incentives to skilling, R&D, and innovation, covering reimbursement for standalone R&D centres and patent registration costs to help build a sustainable local talent and innovation ecosystem.
A Strategic Bet on the Future
With strong connectivity via expressways and the upcoming Noida International Airport, a large skilled workforce, established electronics clusters, and improving ease-of-doing-business mechanisms, Uttar Pradesh is positioning itself as a competitive destination for semiconductor investments.
As India accelerates its push for self-reliance in chip manufacturing, Uttar Pradesh’s latest policy measures aim to anchor critical segments of the semiconductor value chain within the state — from design and fabrication to assembly, testing, and innovation — strengthening its bid to emerge as one of India’s leading silicon powerhouses.
