TN GIM 2024: Tamil Nadu announces 50% top up to Centre's capex-linked semiconductor subsidy

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Under the Tamil Nadu Semiconductor and Advanced Electronics Policy 2024, announced on January 7, the state government will offer up to 50 percent of additional financial incentives to semiconductor projects selected under the Centre's $10 billion chip subsidy plan.

If a semiconductor project selected by the Centre sets up its manufacturing in Tamil Nadu, it will also be eligible for more incentives to train personnel, stamp duty, land and electricity concessions.

Global marquee research or design entities in chips and electronics will also be eligible for up to 30 percent payroll reimbursement for 3 years if they employ the state's residents. The payroll subsidy shall be capped at Rs 20,000 per employee per month.

The state government will reimburse 50 percent of the expenditure incurred for the project, up to a maximum of Rs 1 crore for the investment period, for in-house R&D related to patents, copyright, trademarks, and geographical indications registration. An interest subvention of 5 percent as a rebate in the rate of interest shall be provided for actual term loans taken to finance the project.

Furthermore, the 'Structured Package of Incentives for Advanced Electronics Manufacturing' would be applicable for ‘new/ expansion projects’ in the State with investments made from January 1, 2024. The companies should meet a minimum investment threshold of Rs 200 crores and minimum employment threshold of 150 jobs for the initial Rs 200 crore investment.

For every additional Rs 50 crore of investment, a minimum of 35 jobs should be generated. The minimum investment and employment threshold must be met by the unit(s) within the standard investment period of four years.

Additionally, the companies must commit to a minimum of 20 percent in-house/unit-level value addition from the manufacturing facility.

The third edition of Tamil Nadu's two-day investors meet saw major industrial houses, including Tata Electronics, JSW Energy, and TVS Group committing tens of thousands of crores to the state, as it seeks to regain its leadership as an investment destination amid stiff competition from other provinces including Karnataka, Maharashtra, Gujarat, and Telangana.

TATA Electronics intends to invest Rs 12,082 crore in Tamil Nadu for an enclosure manufacturing and mobile phone assembly unit in Krishnagiri District, with an employment projection of 40,500.

At the summit, which is being held from January 7-8, Tamil Nadu Chief Minister MK Stalin inaugurated Qualcomm's new design centre, set up with an investment of Rs 177.27 crore that will provide jobs to 1,600 people.

Apple supplier Pegatron will invest Rs 1,000 crore for a computing, communications, and consumer electronics manufacturing unit in Chengalpettu, aiming to generate 8,000 jobs.

Danish shipping and logistics company AP Mollar Maersk announced setting up of transport and logistics solutions as well as global capability centres across Tamil Nadu.

The other MoUs inked by Tamil Nadu government on the first day of GIM includes the Rs 515 crore pact signed with Godrej Consumer for a project in Chengalpettu. Other committed investments in the list are Rs 5,000 crore by TVS Group in automobile, realty, and IT and Rs 200 crore by Mitsubishi Electric in Gummidipundi. Ola Electric and AP Moller-Maersk expressed their intent for additional investment in the state.