CIOInsider India Magazine

The Madhya Pradesh government has established a new semiconductor policy to improve state chip design and manufacturing. The strategy, which the State Cabinet approved on February 4, 2025, offers semiconductor fabrication facilities, design facilities, and other associated businesses

subsidized electricity, land at concessional rates and capital and interest subsidies.

For qualified projects, the program offers a capital investment subsidy of up to 25 percent of the total investment or 50 percent of the Government of India's subsidy, whichever is less. Subject to a maximum of Rs.150 crore, a capital investment subsidy of up to 40 percent is available for projects that do not receive central government support.

Furthermore, for a maximum of Rs.10 crore over five years, the policy provides an interest subsidy of 6 percent or the current interest rate, whichever is lower. Semiconductor companies can receive land at discounted rates and a power tariff subsidy of Rs.2 per unit for the first ten years, drastically lowering operating costs and further encouraging investment.

Customized incentive packages, such as extra infrastructural support, tax breaks, and other financial incentives, would be considered for projects with investments over Rs.400 crore. Additionally, the strategy encourages cooperation and public-private partnerships between the commercial sector, academic institutions, and government agencies.