In the largest corporate investment ever in the history of independent India, a joint venture between Vedanta and Foxconn on 14 September signed a Memorandum of Understanding (MoU) with the Gujarat government to invest Rs 1,54,000 crore to set up the plant in the state.
Nohra signed the Memorandum of Understanding on behalf of the state government.
“Vedanta and Foxconn have hired industry experts who are evaluating potential sites for the upcoming plant in Gujarat. Earlier they had evaluated multiple sites in different countries. In December 2021, when the center announced its ‘India Mission for Semiconductors’, they began searching for sites across Various states in India (then she chose Gujarat)”.
Nehra said the promoters are now evaluating the sites in Gujarat on various technical aspects, commercial feasibility, connectivity and utility point of view, adding that the site may be completed in the next two weeks.
“There are many subtle things to consider when choosing a location. For example, the production process can be affected by the vibrations of passing trains. And there should not be any vibrations near the station. And power outages even for one station the second in a year can That lead to a loss of Rs. crore.”
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The project is likely to get huge subsidies and incentives, such as zero stamp duty on the purchase of subsidized land, water and electricity, under the ‘Gujarat Semiconductor Policy 2022-27’ announced by the state government in July this year.
A government official said earlier that Gujarat became the first state in the country to have such a policy dedicated to the semiconductor and display manufacturing sector.
While announcing the policy, the Gujarat government announced that it would set up ‘Dholera Semicon City’ in the Dholera Special Investment Zone near Ahmedabad to attract investors.
Under this policy, eligible projects will be awarded a 75 percent subsidy upon purchasing the first 200 acres of land to set up manufacturing units.
Good quality water will be provided to eligible projects at a rate of Rs 12 per cubic meter for the first five years.
If the investor decides to build his own desalination plant for captive use in the first five years, the government will provide a capital support of 50 percent of the project cost, according to the policy document.
Eligible manufacturing units will also get power tariff subsidy of Rs 2 per unit for the first 10 years of starting production, she said, adding that such projects can also claim exemption from paying any electricity charges.
To encourage investors under this policy, the state government has also announced a 100 percent reimbursement of the stamp duty that first-time investors will pay to take the land for rent, sale or transfer of land.
In order to remove bottlenecks and provide quick clearances to investors, the state government will create a single window mechanism to provide all necessary approvals from one place, the policy document said.
Since uninterruptible power supply is critical to such projects, the government will provide or facilitate “sufficient redundancy in the power grid to ensure high quality power supply for smooth operations”.
The policy also provides assurance that the government will “develop an appropriate water distribution to ensure the delivery of treated water to the eligible project.”