The government on Wednesday said it has notified a special economic zone (SEZ) to be set up by Tata Semiconductor Manufacturing Pvt. Ltd. for electronic hardware and software, including IT/ITeS, at Dholera. 

The company has proposed an investment of ₹91,000 crore to set up India’s first chip fabrication unit, marking a major step in the country’s push to build a domestic semiconductor ecosystem. 

The proposal was approved by the board of approval, the highest body for SEZ-related matters, chaired by the commerce secretary. 

"The department of commerce on April 9 has notified a special economic zone to be set up by Tata Semiconductor Manufacturing Pvt Ltd exclusively for electronic hardware and software including IT/ITeS at Dholera, Gujarat," Additional Secretary in the Commerce Ministry Ajay Bhadoo said. 

The new facility will generare 21, 000 new jobs 

The SEZ will come up on 66.16 hectares of land and is expected to generate around 21,000 jobs, providing a boost to local employment and manufacturing capacity. 

To support growth in the sector, the government last year reduced the minimum contiguous land requirement for semiconductor and electronics component SEZs from 50 hectares to 10 hectares, Bhadoo said. 

So far, five new SEZs in these sectors have been notified, including projects by CG Semi, Kaynes Semicon, Micron Semiconductor Technology India, and Hubballi Durable Goods.

What are the Special Economic Zones? 

SEZs refer to special areas designated within a country whereby businesses are offered various benefits such as tax benefits, easier regulation, and improved infrastructure to facilitate investment and exportation. Companies working within SEZs usually receive several incentives that include duty exemptions, tax holidays, and fast track clearances among others. These are meant to enhance competitiveness in manufacturing and services while stimulating job creation and economic development. 

India’s push for independence in semiconductor    

India is actively seeking ways to establish a robust domestic semiconductor industry in order to minimize its dependence on foreign semiconductor chips while at the same time becoming a stable participant in the global supply chain. This will be achieved through the establishment of the India Semiconductor Mission whereby several incentives are being offered in regard to semiconductor chips manufacture, packaging, and design.