THEBUSINESSBYTES BUREAU
BHUBANESWAR, AUGUST 12, 2026
In a major push to position Odisha as a key hub in India’s
fast-expanding semiconductor landscape, the state Cabinet on Wednesday approved
the third amendment to the Odisha Semiconductor Manufacturing and Fabless
Policy, 2023, widening the incentive framework to cover critical segments
ranging from semiconductor equipment and specialty chemicals to advanced
materials and other components of the supply chain.
The move seeks to transform Odisha’s approach from attracting
individual semiconductor projects to building an integrated ecosystem
encompassing manufacturing, raw materials, supply chains, logistics, ancillary
industries and skilled manpower, even as the state looks to leverage the
priorities of the India Semiconductor Mission (ISM) 2.0.
The policy, originally notified in September 2023, was
amended in March 2024 and July 2025. So far, proposals from five companies have
been approved under the framework, including two projects that have secured
support under the ISM.
The latest amendment has been brought in to align the state
policy with the evolving priorities of ISM 2.0 and incorporate feedback from
stakeholders, officials said.
Under the revised framework, the Odisha government will
provide additional fiscal support equivalent to 25 per cent of the eligible
capital expenditure for projects approved by the ISM. The state assistance will
be disbursed on a pari passu basis with the fiscal support extended by the
Centre, linked to project milestones and corresponding releases approved under
the ISM.
In another significant provision, the amended policy enables
customised incentive packages for mega projects in semiconductor equipment
manufacturing, input supply chains and raw materials. Such packages will be
considered subject to approval by the State Cabinet on the recommendation of a
high-level committee headed by the Chief Secretary.
The expanded policy brings a wider range of activities within
the incentive net, including semiconductor equipment manufacturing,
semiconductor-grade chemicals, specialty gases, advanced materials and other
critical components of the semiconductor supply chain, besides semiconductor
manufacturing, ATMP/OSAT, display manufacturing and fabless design.
The government expects the broader framework to attract
investments not only in semiconductor manufacturing but also in advanced
materials, logistics and ancillary sectors, creating a multiplier effect across
the industrial ecosystem.
The policy is also expected to generate direct and indirect
employment, accelerate skill development and open up new opportunities for
supporting micro, small and medium enterprises, thereby creating a wider
economic base around the emerging industry.
With the inclusion of critical value-chain segments, Odisha
aims to move beyond a project-centric investment strategy and establish an
integrated semiconductor ecosystem capable of supporting manufacturing, supply
chains, materials and enabling infrastructure.
The government said the measures are intended to enhance
Odisha’s attractiveness as an investment destination, strengthen investor
confidence and build a resilient semiconductor ecosystem in the state.
The initiative also dovetails with the Centre’s broader push
for semiconductor self-reliance, with the state seeking to contribute to the
Atmanirbhar Bharat objective by reducing import dependence, encouraging
domestic value addition and creating high-value employment opportunities in
semiconductor manufacturing and allied sectors.
