India unveils first chip fabrication SEZ; four more electronics projects cleared

India has approved its first semiconductor fabrication SEZ in Dholera, Gujarat, with Tata Semiconductor Manufacturing Private Limited set to invest ₹91,000 crore. The project is expected to strengthen domestic value chains and generate around 21,000 jobs. Four additional semiconductor and electronics SEZ proposals have also been cleared, including those by Micron Semiconductor Technology India Ltd, Kaynes Semicon Ltd, and CG Semi Ltd.

 India has taken a major step toward building its semiconductor ecosystem, with the government on Thursday (April 16) notifying the country’s first chip fabrication plant as a Special Economic Zone (SEZ), to be set up by Tata Semiconductor Manufacturing Private Limited at Dholera, Gujarat.

The project entails a massive investment of ₹91,000 crore and marks a significant step in building India’s domestic semiconductor manufacturing capabilities. Spread across 66.166 hectares, the SEZ is expected to generate employment for around 21,000 people.

According to the Commerce and Industry Ministry, the proposed SEZ will cater to electronic hardware, software, and IT-enabled services (IT/ITES), supported by enabling infrastructure and a dedicated approval mechanism aimed at streamlining operations and logistics.

In addition to Tata’s fabrication unit, four more semiconductor and electronics component SEZ proposals have been cleared.

Micron Semiconductor Technology India Pvt Ltd is setting up a ₹13,000 crore facility in Sanand, Gujarat, focused on semiconductor assembly, testing, marking, and packaging (ATMP).

Meanwhile, Aequs Group is developing an electronics component manufacturing SEZ in Dharwad, Karnataka.

Further, Kaynes Semicon Ltd and CG Semi Ltd are investing ₹681 crore and ₹2,150 crore, respectively, in assembly, testing, and packaging operations.

The government has earlier undertaken a series of reforms to strengthen India’s semiconductor and electronics manufacturing ecosystem, particularly through changes in the Special Economic Zones (SEZ) framework and approvals for sector-focused SEZs. These measures are aligned with its broader objective of attracting high-value, capital-intensive investments, encouraging innovation, and improving ease of doing business to build a globally competitive semiconductor industry.

As part of this push, key amendments to the SEZ Rules, 2006 were introduced through a notification dated June 3, 2025. These changes were designed to address the specific needs of semiconductor and electronics manufacturing. Major amendments include

• reducing the minimum land requirement from 50 hectares to 10 hectares,
• easing encumbrance norms,
• allowing the inclusion of free-of-cost supplies in Net Foreign Exchange calculations, and
• permitting domestic sales in the Domestic Tariff Area (DTA) upon payment of applicable duties.

In the wake of these reforms, the Board of Approval for SEZs has given the green light to several key projects in the semiconductor and electronics domain. These efforts are expected to boost domestic value chains, create high-skilled jobs, and significantly reduce India’s dependence on semiconductor imports.