India's Semiconductor Leap: Tax Holidays and Infrastructure Revamp Propel Growth

Extending income tax holidays and waiving import duties on expensive semiconductor equipment could significantly boost India's semiconductor manufacturing capabilities, according to Eswara Rao Nandam, CEO of Polymatech Electronics. Speaking at the Semicon India 2025 event in New Delhi, Nandam emphasized the need for government intervention to foster local development.

Tax holidays provide temporary income tax exemptions to industries, improving cash flow and encouraging investments in strategic sectors. These incentives are coupled with the waiver of import duties on costly semiconductor equipment to ensure funds are available for essential working capital, Nandam highlighted, underscoring infrastructure challenges like power and gas supply as hurdles.

With the launch of the India Semiconductor Mission (ISM) and a robust Production Linked Incentive (PLI) scheme, India is on a transformative journey in semiconductor manufacturing. The recent inauguration of an OSAT Pilot Line Facility in Gujarat marks a significant milestone, as India continues to strengthen its position in the global semiconductor landscape.

(With inputs from agencies.)