India Semiconductor Association

B.V. Naidu, Chairman ISA Chairman and CEO, Sagitaur Ventures India Pvt. Ltd, said: “ISA welcomes the Karnataka Semicon Policy and we are happy that most of our recommendations to the government have been considered and this policy will play a significant role for achieving $120 billion electronic system design and manufacturing industry to grow in Karnataka. Announcement of the semiconductor policy is the first of its kind in India and reflects the spirit of Government to continue its growth in the country."

Rajiv Kapur, managing director, Broadcom India, said: “ISA is pleased to see Karnataka show leadership by recognizing the opportunity available to take the industry to the next level. This policy is the first of its kind coming from a state government of India and will play a big role in stimulating growth.”

S. Janakiraman, president and Group CEO, Product Engineering Services, MindTree, said: “Karnataka has been a hub for electronics and embedded software for the last few decades. Now the time has come to focus on semiconductors, which are an important part of the value chain. The new policy by the Karnataka government will accelerate the pace of investment in the semiconductor sector. We, as ISA and MindTree, are excited about the support we are receiving from the government.”

Dr. Pradip Dutta, ISA Vision Summit 2010 convener and corporate vice president and managing director, Synopsys, said: “The ISA has been working very closely with the state government of Karnataka to draft the semiconductor policy for the last 12 months. At the same time, the ISA has also initiated a policy on electronic system design and manufacturing with Dept of IT, Government of India. While the national target is to reach $400 billion by 2020, Karnataka alone aims to contribute 30 percent of the national target, which is close to $120 billion. We see a strong synergy between the national objectives and the Karnataka Policy. We are all very optimistic, that this will also attract additional investment in the region.”

Jaswinder Ahuja, corporate vice president and managing director, Cadence Design Systems (I) Pvt Ltd: said "Karnataka is India’s semiconductor hub and it is laudable that the Karnataka Government has taken a proactive step to encourage the industry in the form of the semiconductor policy announced today. The Government’s policy is a step in the right direction and takes a balanced view of the various aspects of electronics system design and manufacturing. In particular, the funds announced to provide seed funding to semiconductor, solar and ATMP entrepreneurs will give a fillip to startups setting up projects in the state.

He further added: “A great strength for India, especially Karnataka, is its qualified manpower in the form of engineering graduates. The semiconductor school in conjunction with IIIT is encouraging as it will enable the industry by training fresh graduates to be industry-ready. Encouraging semiconductor excellence in the state is also praiseworthy. While the Rs 10 crore fund allocated towards this is a good first step, the cap of Rs 10 lakh per unit for R&D expenses is limiting. The tax exemptions and incentives for companies that invest in large projects in the state are positive."

Ashok Chandak, senior director, Global Sales and Marketing, NXP Semiconductors India Pvt Ltd, said: It is a good and positive step to make the semiconductor industry visible. For the first time, an industry status has been given to the semiconductor field. The policy gives impression that the government cares about this industry and considers strategic importance of the industry in the long term. The policy covers the entire ecosystem of the industry, which is very important. India and Karnataka need to encourage the electronic product development and manufacturing to become self reliant and reduce the import bills by 2020. This policy makes an attempt to spur the interest and enthusism of the enterprenuers and small/mediaum enterprises to get more inerested, though, the financial support is modest and could have been better."

• To encourage setting up of semiconductor units in tier-2 cities, other than Mysore, Mangalore, Hubli, an incentive of investment-promotion-subsidy would be provided in accordance with the Karnataka Industrial Policy 2009-2014.
• Govt. of Karnataka would provide additional amount of Rs. 25 crores, toward 26 percent contribution to the KITVEN (Karnataka IT venture capital fund) IT Fund for raising funds from the market to assist startup semiconductor units engaged in design and embedded software.
• Govt. of Karnataka would provide financial assistance to firms for filing IP in accordance with the incentives provided in the industrial policy.
• Govt. of Karnataka will provide assistance of 50 percent of the total cost toward purchase of proposed equipment for augmenting the Orchid Tech Space in the STPI to a Characterization Lab. The remaining funds would come from the industry or mobilized through PPP business model. This Lab will be a one-stop solution for hi-tech facilities and will spur growth of R&D in future technology without financial burden to budding entrepreneurs.
• ATMP units will be encouraged with special incentives in the proposed ITIR near BIAL (Bangalore International Airport), Bangalore. (Special incentives for ITIR to be announced separately).
• Govt. of Karnataka would provide all encouragement and assistance to the solar PV manufacturing units under the Karnataka Renewable Energy Policy.
• To encourage setting up of ATMPs in the state, Govt. of Karnataka would provide incentives to units set up in the state by lowering the threshold investments for ATMPs/ecosystem units with investments above Rs. 400 crores and up to Rs. 1,000 crores. Incentives would be provided on a case-to-case basis approach based on specific employment potential.
• As a policy support, to encourage innovation and R&D in chip design, product development, telecom, etc., the Govt. will set up a fund known as ‘Karnataka Fund for Semiconductor Excellence’ of Rs. 10 crores. This fund will be available to the private companies covering up to 50 percent of their R&D expenses, subject to a limit of Rs. 10 lakhs per unit. This financial assistance would be subject to repayment of 10 percent of the profit (after tax) annually for a period of 10 years. Preference would be given to fresh engineering graduates by identifying talent through projects submitted in the college and start-up companies.
• A committe comprising of representatives of VTU, ISA, industry, scientists, and financial institutions would be set up to monitor the activities and functioning of the fund.
• Karnataka Power Corp. and Karnataka Renewable Energy Development Ltd would take steps to develop solar farms on joint ventures/PPP mode in Bijapur, Gulbarga, Raichur and Bellary districts.
• Govt. to set up a focused school under IIIT at a cost of Rs. 10 crores and strengthen the research labs in the institute at a cost of Rs. 5 crores with a contribution of 25 percent from the industry.
• Fiscal incentives would be provided to semiconductor units as per the Karnataka Industrial Policy 2009-2014.

– Investment promotion subsidy.
– Exemption from stamp duty to MSME, large and mega projects.
– Concessional registration charges to MSME, large and mega projects.
– Waiver off conversion fine to MSME, large and mega projects.
– Exemption from entry tax to MSME, large and mega projects.
– Incentives for export oriented enterprises for MSME, large and mega projects.
– Subsidy for setting up ETPs to MSME, large and mega projects.
– Interest free loans on VAT to large and mega projects.
– Anchor units subsidy to first two manufacturing enterprises with minimum employment of 100 members and a minimum investment of Rs. 50 crores.
– Special incentives for enterprises coming up in low HDI districts for large and mega projects.
– Interest subsidy to micro manufacturing enterprises.
– Exemption from electricity duty to micro and small manufacturing enterprises.
– Technology upgradation, quality certification and patent registration for micro and small manufacturing enterprises.
– Water harvesting/slash conservation measures to small and medium manufacturing enterprises in all zones.
– Energy conservation, small and medium manufacturing enterprises in all zones.
– Additional incentives to the enterprises following reservation policy of the state.
– Refund of cost incurred for preparation of project report for micro and small manufacturing enterprises.