UP Cabinet Approves Incentives For INR 3,000+ Cr Semiconductor Investments

SUMMARY

Suresh Kumar Khanna said that 13 of the 14 proposals placed before the council of ministers were approved

Overall, the objective of these incentives is to attract large-scale semiconductor investments to the state, added Khanna

The Union cabinet, earlier this year, gave its nod for a joint venture between HCL and Foxconn to set up a semiconductor unit under the India Semiconductor Mission in Noida

With an eye on expanding semiconductor investments in the state, the Uttar Pradesh cabinet has approved incentives for companies willing to invest INR 3,000 Cr or more.

After the cabinet meeting yesterday, chaired by chief minister Yogi Adityanath, finance minister Suresh Kumar Khanna said that 13 of the 14 proposals placed before the council of ministers were approved.

He said that the incentives, which include interest subsidy, appliance cost reimbursement, relief from net state goods and services tax (SGST) for 10 years, 100% EPF reimbursement (up to INR 2,000 per month) for professionals who are native residents of Uttar Pradesh, subsidy on water charges, and electricity bill reimbursement of up to INR 2 per unit for 10 years, will be given on case-to-case basis.

Overall, the objective of these incentives is to attract large-scale semiconductor investments to the state, added Khanna.

“We all know that in the semiconductor sector, countries like the US, Europe, Japan and Taiwan are global leaders, especially Taiwan, which currently dominates manufacturing,” Khanna said.

The incentives are part of the state’s semiconductor policy, which was introduced in January 2024.

Uttar Pradesh is trying to establish itself as the semiconductor and electronics manufacturing hub in the country.

While major players like Dixon, Samsung, OPPO have their manufacturing facilities in the state, the Union cabinet, earlier this year, gave its nod for a joint venture between HCL and Foxconn to set up a semiconductor unit under the India Semiconductor Mission in Noida. The JV will invest INR 3,700 Cr in the city for this project.

Around the same time, the Union electronics and IT ministry approved INR 417 Cr electronics manufacturing cluster in Uttar Pradesh’s Gautam Buddha Nagar. The cluster, near the upcoming Noida International Airport, is expected to attract INR 2,500 Cr in investment and create over 15,000 jobs.

Last year, the UP government bagged an investment commitment of INR 40,038 Cr under its new semiconductor policy.

The state’s proximity to Delhi NCR, strong expressway connectivity and ability to meet large land requirements through dedicated industrial corridors make it a suitable destination for investors.

Notably, the Centre is mulling a $20 Bn package for the India Semiconductor Mission (ISM) 2.0, which will focus on building a sophisticated chip manufacturing ecosystem in the country.

India also marked a milestone with the development of Vikram 3201 in 2025, the country’s first indigenous semiconductor chip to move from design to fabrication readiness.