Semiconductor plant site in Gujarat likely to be finalised in two weeks

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Semiconductor plant site in Gujarat likely to be finalised in two weeks
Semiconductor plant site in Gujarat likely to be finalised in two weeks

Gujarat became the first state in the country to have such a dedicated policy for the semiconductor and display fabrication sector

A site for the upcoming semiconductor plant of Vedanta and Foxconn, companies that have hired experts who are evaluating possible locations, may be finalised in the next couple of weeks, Gujarat Science and Technology Department Secretary Vijay Nehra said. So far, the joint venture company has not finalised the location as to set up the semiconductor and a display fabrication unit in the state, they are evaluating various sites in Gujarat based on technical aspects, commercial viability and connectivity, Nehra said.

To invest Rs 1,54,000 crore to set up the semiconductor plant in the state, a joint venture of the Vedanta and Foxconn had on September 14 signed a Memorandum of Understanding (MoU) with the Gujarat government, which is the biggest ever corporate investment in the history of independent India.

On behalf of the state government, Nehra had signed the MoU.

“Vedanta and Foxconn have hired sector experts who are evaluating possible sites for the upcoming plant in Gujarat. Earlier they were evaluating multiple sites across different countries. In December 2021, when the Centre had announced the ‘India Semiconductor Mission’, they started looking for sites across different states in India (and then selected Gujarat),” Nehra said.

Adding that the site for the semiconductor plant may be finalised in the next couple of weeks, Nehra said, on different technical aspects, commercial viability, connectivity and utility point of view, the promoters are now evaluating sites in Gujarat.

“There are many minute things which need to be kept in mind while selecting the site. For example, the production process can get affected due to the vibrations of passing trains. There must not be any vibrations near the plant. Power outage of even one second in a year can result in a loss of crores of rupees,” he said.

Under the ‘Gujarat Semiconductor Policy 2022-27’ announced by the state government in July this year, the project is likely to get huge subsidies and incentives, like zero stamp duty on land purchase and subsidised water and electricity.

A government official earlier said that Gujarat became the first state in the country to have such a dedicated policy for the semiconductor and display fabrication sector.

‘Dholera Semicon City’ in the Dholera Special Investment Region near Ahmedabad will be set up to attract investors, the Gujarat government had announced while announcing the policy.

Under this policy, for setting up manufacturing units, 75 per cent subsidy will be given to eligible projects on purchase of the first 200 acres of land.

The eligible projects, for the first five years, will be provided good quality water at the rate of Rs 12 per cubic metre.

According to the policy document, the government will provide capital subsidy of 50 per cent of project cost if the investor decides to build its own desalination plant for captive use in the initial five years.

Also, for the first 10 years of going into production, the eligible manufacturing units would also get power tariff subsidy of Rs 2 per unit, it said, adding that such projects can also claim exemption from paying any electricity duty.

To encourage investors under the policy, the state government has also announced to reimburse 100 per cent of stamp duty which investors would pay for the first time for taking land on lease, sale or on land transfer.

To provide all the necessary approvals from one place, the state government will establish a single window mechanism in order to remove bottlenecks and provide quick clearances to investors, the policy document stated.

The government will provide or facilitate “adequate redundancy in the power grid to ensure quality power supply for smooth operations” as uninterrupted power supply is crucial for such projects.

The policy also gives an assurance that the government will “develop appropriate water distribution to ensure the treated water is delivered to the eligible project.”

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