The government of Assam is making a significant play to attract semiconductor manufacturing. The cornerstone of this effort is the Assam Electronics (Semiconductor, etc.) Policy 2023. This isn't just a standalone state policy; it's designed to dovetail perfectly with the national India Semiconductor Mission (ISM), creating a powerful dual-subsidy framework for companies looking to set up shop.

The core idea is simple but effective:

This strategy, often called subsidy stacking, allows a company to receive financial support from the ISM and then get an additional top-up from the Assam state government. This significantly lowers the massive initial investment required for building semiconductor facilities.

The financial incentives are broken down into two main categories: support for capital expenditure (CAPEX) and support for operational expenditure (OPEX).

For capital costs, the process starts with the central government's Scheme for setting up of Semiconductor Fabs and Display Fabs. The ISM provides fiscal support for up to 50% of the project cost. This is a massive incentive on its own, cutting the initial financial burden in half. Assam then adds its own incentives on top of this. The state offers an additional capital subsidy, effectively increasing the total support and further de-risking the investment for the company.

Let's look at how this stacking works for different types of facilities, specifically semiconductor fabrication plants (Fabs) and Assembly, Testing, Marking, and Packaging (ATMP/OSAT) units.

Beyond the initial setup costs, Assam's policy also provides substantial operational subsidies to make day-to-day business more affordable. This includes a power subsidy of ₹5 per unit for an initial period of five years. Given the immense energy consumption of semiconductor plants, this is a major cost-saver. Additionally, the policy offers a 100% reimbursement of stamp duty paid on the purchase or lease of land for the facility.

To qualify for these incentives, companies must meet specific criteria laid out by both the ISM and the Assam state government. The eligibility is tied to the type of facility being proposed. For a semiconductor Fab or an ATMP unit, the applicant must furnish detailed project reports, financial models, and technology roadmaps. The central government, through the ISM, conducts the primary evaluation. Once a project receives in-principle approval from the ISM, it becomes eligible for the additional top-up incentives from Assam.

The application process is structured to be sequential. First, a proposal is submitted to the ISM. After their rigorous appraisal and approval, the company can then approach the Assam government with the ISM's approval letter to claim the state-level benefits.

Disbursement of the funds is tied to project milestones. The capital subsidies are not handed out as a lump sum upfront. Instead, they are released in tranches as the company meets specific construction and equipment installation targets. This milestone-based approach ensures that public funds are used effectively and that the project progresses as planned. The exact schedule is negotiated and finalized in the Definitive Agreement signed between the government and the company.

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