New policy to help provide subsidy to investors

New Delhi, Mar 22 (UNI) The new semi conductor policy notified today will provide capital subsidy to the investors who would set up chip manufacturing units in the country and the government expects an investment of Rs 24,000 crore in the next three years.

The country is likely to have two-three units at an investment of two-three billion dollars each by 2010, Minister for IT and Communications Dayanidhi Maran said at a press briefing here.

The incentives will be for the manufacture of all semiconductors, displays including Liquid Crystal Displays, Plasma Displays as well as other such panels including solar cells and photvoltaics.

"An appraisal committee to be headed by Additional Secretary in the Department of IT will be formed very soon. The committee will receive expression of interest from interested parties and will submit its recommendations to the government," Mr Maran said.

With the policy being notified, the Minister said he will reopen negotiations with Intel and other companies to explore possibilities of them setting up units in the country.

Intel, the world's largest chipmaker had been waiting for the semiconductor policy to take decisions on its India plans and had in the meantime selected Vietnam for a facility.

The Cabinet had earlier approved the policy.

The subsidy will be in the form of tax breaks and interest-free loans. The incentives will be 20 per cent of the capital expenditure during the first 10 years. The companies have to invest a minimum Rs 2,500 crore and these units will have to be set up in Special Economic Zones to avail this benefit.

If the unit is located outside SEZ, the incentive would be 25 per cent of the capital subsidy in the first 10 years and countervailing duty on capital goods would be exempted.

The threshold investment limit for manufacturing other products like storage devices, micro and nano technology products, assembly and testing of all these products and Organic Light Emitting Diodes is Rs 1,000 crore.

India got its first proposal to start such a fab from a group, including Advanced Micro Devices and SemiIndia, for an investment consideration of three billion dollars in 2005.

UNI