Thursday, September 21, 2023

Vedanta-Foxconn semiconductor factory in Gujarat likely to be completed in 2 weeks: Official

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  • The project is likely to receive huge subsidies and incentives, such as zero stamp duty on land purchases and subsidized water and electricity.
  • Gujarat became the first state in the country to adopt such a specific policy for the semiconductor and display manufacturing sector.
  • The state government has also announced it will refund 100 percent of the stamp duties that investors would pay for renting land for the first time.

Vedanta and Foxconn have hired experts to evaluate potential locations for their upcoming semiconductor factory in Gujarat and a site could be completed in the coming weeks, said Vijay Nehra, secretary of Gujarat’s Department of Science and Technology. So far, the joint venture company has not yet finalized the site as they are evaluating several sites in Gujarat based on technical aspects, commercial viability and connectivity to set up the semiconductor and display manufacturing unit in the state, he said. Nehra to PTI.

In the largest business investment ever in the history of independent India, a joint venture of the Vedanta and Foxconn had signed a Memorandum of Understanding (MoU) with the government of Gujarat on Sept. 14 to invest ₹1.54,000 crore to operate the factory in the state. .

Nehra had signed the MoU on behalf of the state government.

“Vedanta and Foxconn have hired industry experts to evaluate potential sites for the forthcoming factory in Gujarat. Previously, they evaluated multiple sites in different countries. In December 2021, when the Center announced the ‘India Semiconductor Mission’, they started looking for sites in several different countries. states in India (and then selected Gujarat), “said Nehra.

The promoters are now evaluating sites in Gujarat on various technical aspects, commercial viability, connectivity and usability point of view, Nehra said, adding that the site could be completed in the coming weeks.

“There are many small things to consider when selecting the location. For example, the production process can be affected by the vibrations of passing trains. There should be no vibrations near the factory. Power outages of even one second in a year can result in a loss of crores in rupees,” he said.

The project is likely to receive huge grants and incentives, such as zero stamp duty on land purchases and subsidized water and electricity, under the ‘Gujarat Semiconductor Policy 2022-27‘ announced by the state government in July this year.

Gujarat became the first state in the country to adopt such a specific policy for the semiconductor and display manufacturing sector, a government official said earlier.

In announcing the policy, the government of Gujarat had announced that it “Dholera Semicon City‘ in the Dholera Special Investment Region near Ahmedabad to attract investors.

Under this policy, eligible projects will receive a 75 percent grant when purchasing the first 200 hectares of land to set up production units.

The eligible projects will receive good quality water for the first five years at a rate of 12 per cubic meter.

If the investor decides to build its own desalination plant for internal use in the first five years, the government will provide a capital grant of 50 percent of the project cost, according to the policy document.

The eligible generating units would also receive an electricity tariff subsidy of ₹2 per unit for the first 10 years of operation, it said, adding that such projects can also claim exemption from paying electricity taxes.

To encourage investors under the policy, the state government also announced it would refund 100 percent of stamp duties that first-time investors would pay for renting, selling or transferring land.

To remove bottlenecks and quickly give investors approval, the state government will establish a single mechanism to provide all necessary approvals from one place, the policy document said.

Since uninterrupted power supply is critical for such projects, the government will provide or facilitate “sufficient redundancy in the power grid to ensure high quality power supply for smooth operation”.

The policy also guarantees that the government will “develop an appropriate water distribution to ensure that the treated water is delivered to the eligible project”.

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