**Executive Summary**
The Government of India has notified the establishment of the nation's first chip fabrication plant by Tata Semiconductor Manufacturing Private Limited in Dholera, Gujarat. This follows significant 2025 regulatory amendments to the SEZ Rules aimed at fostering a globally competitive semiconductor ecosystem. The notified projects, including those by Tata and Micron, involve substantial capital investments intended to reduce import dependence and generate high-skilled employment.
**Key Points / Main Content**
* **Flagship Semiconductor Fabrication Plant**
* Tata Semiconductor Manufacturing Private Limited will establish India's first chip fabrication plant at Dholera, Gujarat.
* The facility is AI-enabled and covers 66.166 hectares of land.
* The project involves a proposed investment of ₹91,000 crore and is expected to provide employment to 21,000 persons.
* The SEZ includes enabling infrastructure and a dedicated approval mechanism to streamline logistics and operations.
* **Regulatory Reforms (Amendments to SEZ Rules, 2006)**
* Minimum land requirements for semiconductor and electronics manufacturing were reduced from 50 hectares to 10 hectares.
* Encumbrance norms have been made more flexible to address unique manufacturing requirements.
* Net Foreign Exchange (NFE) calculations now include free-of-cost supplies.
* Domestic sales in the Domestic Tariff Area (DTA) are now permitted upon payment of applicable duties.
* **Other Notified SEZ Projects**
* **Micron Semiconductor Technology India Pvt Ltd:** Setting up an Assembly, Testing, Marking, and Packaging (ATMP) unit in Sanand, Gujarat, with an investment of ₹13,000 crore.
* **Aequs Group (Hubballi Durable Goods Cluster):** Establishing an electronic component manufacturing SEZ in Dharwad, Karnataka.
* **CG Semi Pvt. Ltd. and Kaynes Semicon Pvt. Ltd.:** Both entities received approvals for Outsourced Semiconductor Assembly and Testing (OSAT) units.
**Impact Analysis**
**Tata Semiconductor Manufacturing Private Limited**
**Impact**
The entity is authorized to develop India’s first chip fabrication facility, benefiting from streamlined logistics and a specialized SEZ framework.
**Action Required**
Commence development of the 66.166-hectare site in Dholera to fulfill the proposed investment of ₹91,000 crore and create 21,000 jobs.
**Semiconductor and Electronics Manufacturers (Micron, CG Semi, Kaynes, etc.)**
**Impact**
These stakeholders benefit from eased regulatory hurdles, such as lower land thresholds and the ability to sell into the domestic market.
**Action Required**
Proceed with the establishment of ATMP, OSAT, and component manufacturing units as per their respective notifications and investment commitments.
**Government and Board of Approval for SEZs**
**Impact**
These bodies have successfully transitioned the SEZ law to support capital-intensive, high-tech investments and integrated manufacturing clusters.
**Action Required**
Continue to provide policy support and oversee the gradual build-up of the domestic semiconductor value chain to ensure a resilient ecosystem.
Key Entities Referenced
Tata Semiconductor Manufacturing Private Limited: The primary entity notified to establish India's first chip fabrication plant at Dholera, Gujarat, with a proposed investment of ₹91,000 crore.
SEZ Rules, 2006: The regulatory framework amended to facilitate semiconductor manufacturing by reducing land requirements and easing operational norms for sector-specific SEZs.
Dholera, Gujarat: The central location designated for the establishment of India's first semiconductor fabrication Special Economic Zone.
Board of Approval for SEZs: The regulatory body responsible for granting approvals to major semiconductor and electronics manufacturing proposals under the revised SEZ guidelines.
Ministry of Commerce & Industry
Government Notifies India’s First Chip
Fabrication Plant at SEZ Dholera
Posted On: 16 APR 2026 4:53PM by PIB Delhi
Government has notified that an SEZ to be set up by M/s. Tata Semiconductor Manufacturing Private
Limited exclusively for Electronic Hardware and Software including IT/ITES at Dholera, Gujarat. The
SEZ will be spread over 66.166 hectares of land and is poised to provide employment to 21000 persons.
The SEZ is designed to support electronic hardware, software, and IT-enabled services, and includes
enabling infrastructure and a dedicated approval mechanism to streamline operations and logistics. This is
India’s first chip fabrication plant.
Earlier, Government had taken several significant steps to strengthen India’s semiconductor and
electronics manufacturing ecosystem through progressive reforms in the Special Economic Zones (SEZ)
law and targeted approvals of sector-specific SEZs. In line with the Government’s focus, these reforms are
aimed at promoting high-value, capital-intensive investments, fostering innovation, and enhancing ease of
doing business on developing a globally competitive semiconductor ecosystem.
Key amendments to the SEZ Rules, 2006 were carried out through the notification dated 03.06.2025 to
address the unique requirements of semiconductor and electronics manufacturing, including reduction in
minimum land requirement from 50 hectares to 10 hectares, flexibility in encumbrance norms, inclusion
of free-of-cost supplies in Net Foreign Exchange calculations, and permitting domestic sales in the
Domestic Tariff Area (DTA) on payment of applicable duties.
Following through on these reforms, the Board of Approval for SEZs has accorded approvals to major
proposals of setting up of SEZs for semiconductor and electronics. Notably, Micron Semiconductor
Technology India Pvt Ltd is establishing an SEZ for semiconductor Assembly, Testing, Marking and
Packaging in Sanand, Gujarat, with an estimated investment of ₹13,000 crore, while Aequs Group is
setting up an electronic component manufacturing SEZ in Dharwad, Karnataka. These projects are
expected to catalyse the development of domestic value chains, generate high-skilled employment, and
reduce import dependence. List of SEZs approved after the said regulatory easing, is as below:
Sl. Name of the entity Date of Land Proposed Proposed Type of Operation
No. notification Area
Investment Employment
(in (direct/
(in ₹
hectares) indirect)
crore)1. M/s Micron 23rd June, 37.64 13,000 20,786 Assembly, Testing,
Semiconductor 2025 Marking and
Technology India Packaging Unit
Pvt. Ltd
2. M/s. Hubballi 23rd June, 11.549 100 4,360 Electronics
Durable Goods 2025 Components
Cluster Private Manufacturing and
Limited services
3. M/s CG Semi Pvt. 23rd 11.541 2150 1,911 Outsourced
Ltd. September, Semiconductor
2025 Assembly and
Testing for
Semiconductor
chips
4. M/s Kaynes 26th 18.44 681 2,020 Outsourced
Semicon Pvt. Ltd. September, Semiconductor
2025 Assembly and
Testing (OSAT)
Unit
5. M/s. Tata 9th April, 66.166 91,000 21,000 AI enabled
Semiconductor 2026 Semiconductor
Manufacturing Fabrication facility
Private Limited
These SEZs are envisaged to contribute to the gradual build-up of a robust, competitive, resilient, and
future-ready semiconductor ecosystem. These initiatives, together with industry participation and policy
support, are facilitating and paving a way for the creation of integrated manufacturing clusters,
strengthening domestic capabilities, and positioning India as an emerging hub for semiconductor and
electronics production.
***
Abhishek Dayal/Anushka Pandey
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