New Delhi, Apr 29 (KNN) The Indian government is working on rolling out a fresh multi-billion-dollar incentive package for semiconductor companies, sources reveal.

This move comes after nearly exhausting the USD 9.3 billion production-linked incentive scheme launched in December 2021 to attract investments in the sector, reported TOI.

According to top sources familiar with the development, preliminary work on the new package, which is likely to be ‘much bigger than the previous one’, has already begun.

However, an official announcement will be made only after the new government takes charge following the national elections.

"The new package would be one of the key agendas for the new government and will be taken up on a priority basis," a source stated. The fresh proposals for semiconductor projects necessitate a larger incentive package to provide immediate assurances to companies in terms of fiscal support.

The success of the December 2021 package, which offered fiscal support of up to 50 per cent of a project's cost to eligible semiconductor and display fabricators, has prompted the government to work on a new incentive scheme.

This move comes amid aggressive semiconductor incentive programs announced by countries like the United States and China.

India's efforts, led by Communications & IT Minister Ashwini Vaishnaw, have already attracted major investments, including a USD 2.7 billion testing and packaging unit by American semiconductor giant Micron in Gujarat last June.

Recently, the government approved three proposals worth nearly USD 15.9 billion including Tata Electronics' USD 11.2 billion project to set up India's first semiconductor fab unit in partnership with Taiwanese Powerchip Semiconductor Manufacturing.

(KNN Bureau)