India Notifies First Chip Fabrication Plant at Dholera SEZ

In a major step for India’s semiconductor ambitions, the government has notified the country’s first chip fabrication plant at the Special Economic Zone in Dholera, Gujarat. The facility will be set up by Tata Semiconductor Manufacturing Private Limited and will focus on electronic hardware, software, and IT-enabled services. Spread across 66.166 hectares, the project is expected to generate employment for around 21,000 people.

The newly notified SEZ marks an important milestone in India’s push to build a domestic semiconductor ecosystem. According to the government, the Dholera unit will function as an AI-enabled semiconductor fabrication facility, supported by enabling infrastructure and a dedicated approval mechanism aimed at streamlining operations and logistics.

The move comes after a series of reforms to the Special Economic Zones Rules, 2006, notified on June 3, 2025, to better suit the requirements of semiconductor and electronics manufacturing. These changes reduced the minimum land requirement for such projects from 50 hectares to 10 hectares, relaxed encumbrance norms, allowed free-of-cost supplies to be counted in Net Foreign Exchange calculations, and permitted domestic sales in the Domestic Tariff Area on payment of applicable duties.

The government said these policy changes have already helped accelerate approvals for major semiconductor and electronics proposals. Among the prominent projects approved after the regulatory easing are Micron Semiconductor Technology India Pvt. Ltd.’s semiconductor Assembly, Testing, Marking and Packaging unit in Sanand, Gujarat, with a proposed investment of ₹13,000 crore, and an electronics components manufacturing SEZ by Hubballi Durable Goods Cluster Private Limited in Dharwad, Karnataka.

Other approved projects include CG Semi Pvt. Ltd.’s outsourced semiconductor assembly and testing facility, Kaynes Semicon Pvt. Ltd.’s OSAT unit, and the Tata Semiconductor fabrication project at Dholera, which carries the largest proposed investment among the listed SEZs at ₹91,000 crore.

The government said these semiconductor-focused SEZs are expected to strengthen domestic value chains, create high-skilled jobs, reduce import dependence, and support the emergence of integrated manufacturing clusters. With these approvals and policy support measures, India is positioning itself as an increasingly competitive hub for semiconductor and electronics manufacturing.

Reference: PIB