MEITY issues modified scheme for setting up of Compound Semiconductors /Silicon Photonics/ Sensors Fab/Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking, and Packaging (ATMP)/ Outsourced Semiconductor Assembly and Test (OSAT) facilities in India

Oct 06, 2022 | by TeamLease RegTech Legal Research Team

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Industry Specific ComplianceThe Ministry of Electronics and Information Technology (MEITY) on October 04, 2022, issued the modified scheme for setting up of Compound Semiconductors /Silicon Photonics/ Sensors Fab/Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking, and Packaging (ATMP)/ Outsourced Semiconductor Assembly and Test (OSAT) facilities in India to strengthen the electronics manufacturing ecosystem and help establish a trusted electronics value chain in the areas of application of these fabrication and packaging technologies and also to attract investments.

The following have been stated: 

• Eligibility and Financial Incentives from the Government of India

The applicant Companies / Joint Ventures should have the following experience: A. Own and operate a commercial Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab / Discrete Semiconductors Fab or Silicon Semiconductor Fab and Fiscal support from the Government of India will be 50 % of Capital Expenditure.

• Financial Support

The scheme shall extend a fiscal support of 50% of the Capital Expenditure for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab/ Discrete Semiconductor Fab and Semiconductor ATMP / OSAT facilities in India.

• Demand Aggregation Support

Compound Semiconductors / Silicon Photonics / Sensors Fabs / Discrete Semiconductors Fab and ATMP / OSAT units set up in India will be supported through purchase preference in procurement of electronic products by the Government under the Public Procurement (Preference to Make in India) Order 2017.

• Support for R&D, Skill Development, and Training

Up to 2.5% of the outlay of the scheme shall be earmarked for meeting the R&D, skill development and training requirements for the development of Compound Semiconductors / Silicon Photonics / Sensors Fab / Discrete Semiconductors Fab and ATMP ecosystem in India

• Capital Expenditure

“Capital Expenditure” for the purpose of the scheme shall include expenditure incurred on building, clean rooms, plant, machinery, equipment & associated utilities (including used / second hand / refurbished); transfer of technology (ToT) including cost of technology; and research & development (R&D). Details regarding the eligibility of capital expenditure shall be provided in the scheme guidelines.

• Tenure of the Scheme

The scheme will be open for receiving applications till 31.12.2024. All applicants who had applied in pursuance of the Gazette Notification dated 21st December, 2021 (earlier scheme) shall be allowed to submit modifications as per the new scheme contained in this Notification.

• Governance Mechanism

The scheme will be implemented through a Nodal Agency (India Semiconductor Mission) and such nodal agency will be responsible for receipt of applications, carrying out a financial and technical appraisal of the applications received under the scheme; implementing the scheme, and carrying out other responsibilities as assigned by Ministry of Electronics and Information Technology from time to time. The functions and responsibilities of the nodal agency will be elaborated in the Scheme Guidelines to be issued by the Ministry of Electronics and Information Technology separately.

• Approval

The applications received under the scheme shall be appraised on an ongoing basis and implementation will continue as per the approvals accorded under the scheme.

• Disbursement Process

The fiscal support of 50% against the capital expenditure will be released on pari-passu basis after the approval of the application, subject to terms and conditions stipulated in the Scheme / Guidelines / Approval Letter and meeting the threshold value for capital expenditure.

• Impact Assessment

Mid-term appraisal of the scheme will be done after two years of its implementation or as per the requirement to assess the impact of the scheme, off-take by the applicants and economy in terms of the stated objectives. Based on such an impact assessment, the decision will be taken to increase the tenure of the scheme and change its financial outlay with the approval of the Minister of Electronics and Information Technology.

[Notification No. F. W-38/21/2022-IPHW]


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