Karnataka calls for Centre’s fiscal support to boost chip projects

The letter comes days after Kharge alleged that a number of big ticket investments in the electronics sector were going to states like Gujarat and Uttar Pradesh.

“Given the national level focus which has been provided to the sector, Karnataka is working on increasing its competitiveness and continues to be the frontrunner in developing a conducive ecosystem for electronics and semiconductor companies,” Kharge said in his letter.

He said that the state has the highest share of the “most innovative companies” in India. Contributing to -10 per cent of India’s Industrial output, Karnataka has also been a top state in terms of electronic exports, currently exporting $4.52 billion worth of electronics, ranking 3rd in the country,” he added.

Kharge highlighted Karnataka’s special incentives scheme for the electronics design and manufacturing sector, under which the state government is offering companies a 25 per cent capital subsidy on land, a 20 per cent capital subsidy on plant and machinery, reimbursements on stamp duty and registration charges, and production linked incentives at l per cent of annual turnover, among other things.

“The state being home to more than 300 export-oriented manufacturing units is the largest chip design hub in India, housing more than 100 fabless chip design houses and is the leading producer of aerospace and defence equipment in India,” Kharge stated in his letter.

“In order to upgrade the existing ecosystem to attract investments in the ESDM sector, Karnataka is already developing 2 land parcels namely Kochanahalli Industrial Area in Mysuru District and Kotur-Belur Industrial Area in Dharwad district for setting up of Electronics Manufacturing cluster under Government of India’s Modified Electronics Manufacturing cluster (EMC 2.0) scheme. We are also looking at setting up 2 more EMCs which will be in and around Bengaluru,” he added.