BHUBANESWAR: The state cabinet chaired by Chief Minister Mohan Charan Majhi on Wednesday approved expansion of its semiconductor policy to cover critical segments of the chip supply chain and offered additional fiscal support of 25 per cent of eligible capital expenditure for projects approved under the Centre’s India Semiconductor Mission (ISM), in a bid to attract large investments into the sector.
The cabinet approved the third amendment to the Odisha Semiconductor Manufacturing and Fabless Policy, originally notified in September 2023 and modified in March 2024 and July 2025, said chief secretary Anu Garg in her post-cabinet briefing.
She said the revised policy widens the incentive framework beyond semiconductor manufacturing, assembly, testing, marking and packaging (ATMP)/outsourced semiconductor assembly and test (OSAT) units, display manufacturing and fabless design to include semiconductor equipment, semiconductor-grade chemicals, specialty gases, advanced materials and other supply-chain components.
Under the amended policy, the state government will provide fiscal assistance equivalent to 25 pc of eligible capex for projects approved by ISM. The state support will be disbursed on a pari passu basis with the Centre’s assistance, linked to project milestones and corresponding releases approved by ISM.
The amendment is also aimed at improving Odisha’s competitiveness vis-a-vis other states seeking to attract semiconductor investments, particularly in high-value manufacturing, research and development and strategic supply-chain segments, she added.
The government has also made provisions for customised incentive packages for mega projects involving semiconductor equipment, input supply chains and raw materials. Such packages will require state cabinet approval based on recommendations of a high-level committee headed by the chief secretary, said Garg.
The amendment comes amid a shift in national semiconductor policy towards building a wider domestic ecosystem spanning chip fabrication, packaging, equipment, materials and other critical inputs.
The semiconductor policy of the state, first introduced in 2023, has so far resulted in approvals for projects proposed by five companies, with two projects securing support under the India Semiconductor Mission.
The government expects the expanded policy to attract investments across the semiconductor value chain and create direct and indirect employment in manufacturing, advanced materials, logistics and ancillary industries. It also aims to encourage skill development and provide opportunities for local MSMEs supplying the emerging industry, the chief secretary said.
The state sees the broader incentive framework as a move from a project-centric approach towards an integrated semiconductor ecosystem, while reducing import dependence and supporting the objectives of Atmanirbhar Bharat.