Archive · 18 Sep 2026
Centre Tightens Rules for Semicon 2.0 Chip Projects
The government has made new rules for companies building chip projects in India.
These projects are supported by a large government incentive programme called Semicon 2.0.
Companies cannot sell or mortgage parts of their projects before the whole project starts making products commercially.
They may do certain normal business activities, but other transfers need approval from the government’s nodal agency.
After production begins, supported companies must keep operating for at least three years.
The programme covers chip factories, equipment and materials, packaging, research, design, and worker training.
The latest guidelines cover three of the programme’s six areas.
Some costs, such as temporary buildings, land development, technology transfers, and research, will not count as eligible investment.
Semicon 2.0 projects cannot be sold, disposed of, or mortgaged before the entire project begins commercial production without prior approval.
Supported units must remain in commercial production for at least three years after the project’s commercial production begins.
The government has allocated Rs 1.27 lakh crore in incentives for Semicon 2.0.
Guidelines have been issued for machines and materials, new fabs, and ATMP and OSAT industry support.
Land development, temporary facilities, technology transfer, construction-period interest, and research costs are excluded from eligible capital expenditure.
- Who
- The Indian government and companies seeking support for semiconductor projects.
- What
- The government issued guidelines tightening asset-transfer rules and defining eligible investments under Semicon 2.0.
- When
- The guidelines were issued on Thursday; supported units must operate for at least three years after commercial production begins.
- Where
- New Delhi, with the rules applying to projects under India’s Semicon 2.0 programme.
- Why
- To regulate government-supported chip projects and strengthen India’s semiconductor ecosystem through incentives and investment requirements.
- Programme
- Semicon 2.0
- Incentive outlay
- Rs 1.27 lakh crore
- Asset restriction
- Project assets cannot generally be sold, disposed of, or mortgaged before the entire project declares commercial production without prior approval.
- Minimum operating period
- Three years from commencement of commercial production of the entire project.
- Guidelines issued for
- Machines and materials; setting up more fabs; and strengthening the ATMP and OSAT industry.
- Excluded costs
- Land development, temporary facilities, technology transfer, interest during construction, and research and development.