ANNOUNCED AS TEMPORARYNo
Interest payment subsidy
On 14 February 2014, the Government of India provided a series of incentives including interest free loans of approximately INR5124 crores each (~USD 822 million*) to two Semiconductor Wafer Fabrication (Fab) facilities.
The incentives where granted under a scheme designed the fall of 2013. On 9 October 2013, the Indian Ministry of Communcations & Information Technology invited Expressions of Interest (EoI) for setting up Semiconductor Wafer Fabrication (Fab) facilities in India.
To this end, the government shall provide any of the following incentives:
i) Reimbursement of 25% of the capital expenditure of the project under the Modified Speical Incentives Package scheme (M-SIPS)
ii) Reimbursement of Countervailing Duty on purchase of capital goods under M-SIPS
iii) Excise duty paid on products of Fab may be reimbursed under M-SIPS
iv) Waiver of basic customs duty may be provided for capital goods, raw materials, consumables not covered under any scheme
v) Investment and R&D based deductions under the Income Tax Act
vi) Viability Gap Funding (VGF) in the form of interest-free loans
This proposal aligns within the strategy of India to develop capacities inthe Electronics Systems Design and Manfacturing sector (see related measures).
The GTA includes state guarantees and other financial incentives thatare likely to affect the restructuring and performance of firms facinginternational competition, whether from imports, in export markets, andfrom foreign subsidiaries.
*INR to USD conversion as on 16 Febryary @ INR 62.29/USD
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