The government of Madhya Pradesh has approved the Madhya Pradesh Semiconductor Policy 2025, which integrates financial and other incentives to encourage chip design and manufacturing in the state. This policy includes capital and interest subsidies, land at concessional rates, and subsidised electricity for fabrication units, design facilities, and other semiconductor manufacturing units.
With the increasing demand for semiconductor components across sectors like electronics, automobiles, and IT, Madhya Pradesh aims to create an environment conducive to investment, innovation, and a strong semiconductor ecosystem. The state offers capital investment subsidies of up to 25 per cent of the investment or 50 per cent of the subsidy provided by the Government of India, whichever is lower, for eligible projects. Companies can also receive a 40 per cent capital investment subsidy with a cap of Rs 1.5 billion for projects not approved by the government.
The policy also provides 6 per cent interest subsidies, or the prevailing applicable interest rate (whichever is lower), for up to 5 years, capped at Rs 100 million. Land will be provided at concessional rates, and for the first 10 years, semiconductor companies can receive a power tariff subsidy of Rs 2 per unit. Projects exceeding Rs 4 billion may be considered for customised incentive packages, including additional infrastructure support, tax rebates, and other financial aid.
This policy further promotes public-private partnerships, collaboration between government, academia, and the private sector, and encourages Foreign Direct Investment (FDI) and international collaborations. Companies are encouraged to invest in research and development and technological innovations, with financial aid available for research in semiconductor technologies through special funds and programs. Additionally, the government aims to minimise delays and facilitate the setup and expansion of operations in the state by providing a simplified regulatory framework for new projects.
