Tata Group to invest Rs 40,000 crore in Assam for semiconductor plant

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Guwahati: The Tata Group, one of India’s largest and most diversified conglomerates, has proposed to set up a semiconductor processing plant in Assam, a northeastern state of India, with an investment of about Rs 40,000 crore ($5.4 billion), according to the state’s Chief Minister Himanta Biswa Sarma.

Sarma announced on Friday while addressing a function at the Assam Engineering College in Guwahati, the state’s largest city. He said that the Tata Group’s subsidiary, Tata Electronics Ltd, has submitted an application to the Government of India for setting up an electronic centre at Jagiroad, a town in Morigaon district, about 55 km from Guwahati.

“They have submitted a proposal to the Government of India with an outlay of about Rs 40,000 crore. This is very good news for us,” Sarma said.

He added that the Tata Group had held initial talks with the state government about the semiconductor assembly and packaging plant, and after being satisfied with the discussions, they had approached the Centre for final approval, which is expected soon.

“If all goes well, we will see a major investment in the state which will create a positive environment for industrialisation. We are in touch with the Centre and hope that the final approval will be given in a month or two,” he said.

Sarma also said that the Tata Group had requested the state government to train 1,000 people for employment in the unit, and the government had agreed to do so.

“We used to always ask why the electronics and IT industry did not come to our state. Now it is changing. This is a big opportunity for our youth to get skilled and employed in a high-tech sector,” he said.

He also thanked Prime Minister Narendra Modi for his “continuous guidance in transforming our state” and said that the state government was committed to providing all the necessary support and incentives to the Tata Group and other investors.

The state cabinet had in August approved the Assam Semiconductor Manufacturing and Electronic Production Policy, which aims to attract investments in the electronics sector and create employment opportunities.

The policy offers various incentives such as land subsidies, power subsidies, tax exemptions, interest subsidies, and capital subsidies to investors.

The Tata Group’s proposal to set up a semiconductor plant in Assam comes at a time when India is facing a shortage of chips and electronic components due to the global supply chain disruptions caused by the COVID-19 pandemic.

The government has been trying to boost the domestic production of semiconductors and electronics and has launched schemes such as the Production Linked Incentive (PLI) and the Modified Special Incentive Package Scheme (MSIPS) to attract global and local players.

Semiconductors are essential components for various sectors such as telecom, IT, defence, aerospace, automotive, and consumer electronics.

According to a report by the India Electronics and Semiconductor Association (IESA), the Indian semiconductor market is expected to grow from $23.6 billion in 2020 to $36.2 billion in 2025, at a compound annual growth rate (CAGR) of 8.9%.

However, the report also said that India’s semiconductor consumption is largely dependent on imports, which account for more than 90% of the demand.

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The report suggested that India should aim to reduce its import dependence and increase its self-reliance on semiconductors by developing a robust ecosystem of design, manufacturing, and testing.

The Tata Group’s move to invest in Assam for a semiconductor plant could be a significant step in that direction, and could also boost the development of the northeastern region, which has been lagging behind the rest of the country in terms of industrialisation and infrastructure.