Karnataka Semiconductor Policy: Subsidies, Capex & ESDM Benefits
Discover the main advantages and incentives of the Karnataka Semiconductor Policy, as well as how your company can get benefit from them. Expert compliance & advisory by Cretum Advisory.
India’s semiconductor mission is more than just policy—it’s an economic strategy. At the core of this transformation is Karnataka. Already home to 40% of India’s ESDM exports and more than 400 chip design firms, Karnataka’s Semiconductor Policy is not just a step but a leap toward positioning India as a global chip manufacturing hub.
Objectives of Karnataka Semiconductor Policy
– Establish Karnataka as the top semiconductor and ESDM manufacturing state
– Attract investment of ₹80,000+ crore
– Enable at least 2-3 fabrication units (200mm/300mm)
– Support 100+ design and manufacturing units
– Create direct and indirect employment for 50,000+ skilled professionals
– Align with India’s national DLI and PLI schemes
Key Incentives under the Policy
Karnataka Semiconductor Policy offers one of the most competitive incentive ecosystems in India. Here’s what you get when you set up a design center, an ATMP (Assembly, Testing, Marking, and Packaging) unit, or a full-scale fab unit:
– Capital Investment Subsidy: Reimbursement of 25% of fixed capital investment
Interest subsidies on term loans of up to 6% for periods of five to seven years
100% exemption from stamp duty and registration fees
R&D incentives include a 20% reimbursement for design setup and VLSI labs.
Power Tariff for 5 Years Subsidy: Rs. 2 per unit
Personalized Incentives: For investments over ₹1,000 crore
Strategic Zones and Infrastructure
The state established the following significant industrial zones and EMCs (Electronics Manufacturing Clusters):
Karnataka’s Kalyana region-Tumakuru (CBIC corridor)
Bengaluru Rural: Near NH44 (SEZ access) and Bengaluru Airport
These areas support India National Semiconductor Mission and provide plug and play infrastructure and single-window clearances.
Important Takeaways: Data & Statistics
- – Karnataka contributes to 40% of India’s ESDM exports
- – 400+ chip design firms in Bengaluru
- – India currently imports ~$15 billion in semiconductors annually
- – Policy aims to attract ₹80,000 crore+ investment
- – Goal: Employment generation of 50,000+
The Karnataka Semiconductor is a framework for change rather than merely a vision. For companies in the semiconductor value chain, it’s a fantastic opportunity with strong government support, industrial infrastructure, and financial incentives. However, clever execution is the key to success, which includes handling regulatory compliance, comprehending incentives, and effectively organizing your business.This is where Cretum Advisory gives you the edge.
How Cretum Advisory Can Help You Leverage This Policy?
Cretum Advisory specializes in helping businesses capitalize on government incentives, structure projects for compliance, and access funding without getting lost in paperwork. Here’s how we help:
– Eligibility assessment for Karnataka Semiconductor Policy
– Project planning and incentive mapping
– Entity structuring & location feasibility
– End-to-end documentation & application filing
– Liaisoning with Udyog Mitra, K-Tech, and State Industrial Departments
– Customs, EPCG, and import documentation advisory
– MIS, subsidy accounting, investment audit, and tax compliance
– GST & Income Tax return filing, including for high-capex firms
– CFO Services for reporting, compliance, and financial due diligence
Whether you’re an Indian startup, a global chip company entering India, or an ESDM manufacturer, Cretum Advisory becomes your on-ground strategy partner.
The Final Thought
The Karnataka Semiconductor Policy is a path for significant change, not merely a document. Whether you’re an early-stage VLSI startup or a multinational fab giant, you need to get your structure right, claim eligible incentives, and ensure long-term compliance. This is where Cretum Advisory comes in—not merely as consultants, but as strategic growth partner with comprehensive knowledge of finance, policy, and execution.
Frequently Asked Questions (FAQ)
Q: Who can get benefit from the advantages provided by Karnataka semiconductor policy?
A: Businesses making investments in Karnataka Semiconductor manufacturing, R&D facilities, ATMP facilities, or VLSI
Q: What is the minimum required investment?
A: It is vary from: ₹10,000+ Crore for fabs, ₹2,000+ Crore for ATMP, and ₹50+ Crore for Design/R&D centers.
Q: Does this policy work with India’s central PLI/DLI schemes?
A: Yes,The Karnataka policy complements national-level schemes like the DLI and National Semiconductor Mission.
Q: Can global companies apply?
A: Yes, FDI and JVs are encouraged, especially those bringing advanced fabrication or design tech.