New Delhi, September 4
Extending income tax holidays and waiving import duties on expensive semiconductor equipment will accelerate India's semiconductor manufacturing capabilities, said Eswara Rao Nandam, CEO of Polymatech Electronics, a company engaged in providing chip manufacturing solutions.
Speaking with ANI on the sidelines of Semicon India 2025 in the national capital, Polymatech Electronics CEO said, "We wanted to request government intervention so that the actual semiconductor development will happen in India. First, the income tax holiday has been granted to semiconductor companies. And the second point is that the semiconductor equipment is very, very expensive equipment. When we are bringing that equipment, there will be a lot of taxes and duties because nobody is manufacturing in India."
An income tax holiday means that the government gives a company or an industry a temporary exemption from paying income tax on its profits for a fixed number of years. Governments usually offer tax holidays to encourage investment in strategic sectors such as semiconductors, renewable energy, infrastructure, and IT.
During the holiday period, the company does not pay corporate income tax, which improves its cash flow and makes new projects financially attractive.
"When you are importing import duties, all those things have to be waived so that the cash flows can be used for the working capital. And the raw material and the machinery that the government look into this. These two are the main things," he added.
He also flagged infrastructure bottlenecks that could hinder India's semiconductor growth.
"Uninterrupted power supply is a must and the first ingredient. Second one is lots of gases are required for the semiconductor industry, and someone has to work on this, or the government has to put someone in charge, or multiple companies to bring in all those gases available for the semiconductor industry," Rao said.
The company, which began manufacturing opto-semiconductors in 2018, is simultaneously scaling up its global and domestic footprint.
On the government's Semiconductor Mission 2.0, Rao welcomed the emphasis on indigenous technology.
"Polymer Tech is a front-runner in this and we already have 24 patents in our name... it is a most welcome decision by the Honourable Minister of Electronics and Information Technology," he said.
Speaking about the response in the event, Nandam said Semicon India 2025 has been encouraging. "Response is quite good... can see the badges are not available. Many people are here," Rao noted.
The ongoing Semicon India event in New Delhi was inaugurated by Prime Minister Narendra Modi. It features sessions on the progress of the Semicon India Programme, semiconductor fab and advanced packaging projects, infrastructure readiness, smart manufacturing, innovations in R&D and artificial intelligence, investment opportunities, state-level policy implementation, and other topics.
In just four years, since the launch of the India Semiconductor Mission (ISM) in 2021, India has transformed its semiconductor journey from vision to reality. To support this vision, the government announced a Rs 76,000 crore Production Linked Incentive (PLI) scheme, of which nearly Rs 65,000 crore has already been committed.
Additionally, on August 28, a major milestone in India's semiconductor journey was achieved with the launch of one of the country's first end-to-end Outsourced Semiconductor Assembly and Test (OSAT) Pilot Line Facilities in Sanand, Gujarat. Semiconductor company CG-Semi is expected to roll out the first 'Made in India' chip from this pilot facility.
— ANI
Reader Comments
Good points about infrastructure too! Uninterrupted power and industrial gases are basic requirements. Hope state governments are listening - we need reliable infrastructure beyond just tax benefits to make this mission successful.
While I support the semiconductor mission, I hope these tax benefits come with strict performance conditions. Companies should be accountable for actual production targets and technology transfer, not just enjoying tax holidays.
So proud to see India making progress in semiconductors! The OSAT facility in Gujarat is a great start. Hope we see more indigenous companies like Polymatech leading the charge with their patents 💪
The 76,000 crore PLI scheme shows government's commitment. Now we need private sector to step up with actual investments. Tax benefits will definitely help improve ROI for these capital-intensive projects.
Great to see India focusing on semiconductor self-reliance. The global chip shortage showed how vulnerable we are. Hope these initiatives create high-quality jobs and boost our electronics manufacturing ecosystem.
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