Dholera: The Government has officially notified India’s first chip fabrication plant to be set up in a Special Economic Zone (SEZ) at Dholera, Gujarat.
The SEZ will be developed by M/s. Tata Semiconductor Manufacturing Private Limited and will exclusively cater to electronic hardware, software, and IT/ITES operations, marking a major milestone in India’s chip fabrication journey.
Spread across 66.166 hectares, the Dholera SEZ is expected to generate employment for approximately 21,000 people.
The project is designed to support electronic hardware, software, and IT-enabled services, and will include enabling infrastructure along with a dedicated approval mechanism to streamline operations and logistics.
As India’s first Chip Fabrication facility, the project reflects the government’s continued focus on strengthening domestic semiconductor capabilities.
Policy Push Accelerates Chip Fabrication Ecosystem
The notification follows a series of policy reforms undertaken by the Government to strengthen the semiconductor and electronics manufacturing ecosystem.
These reforms, aligned with India’s Chip Fabrication ambitions, aim to promote high-value, capital-intensive investments while fostering innovation and improving ease of doing business.
Key amendments to the Special Economic Zones (SEZ) Rules, 2006, introduced through a notification dated June 3, 2025, were specifically designed to address the unique requirements of Chip Fabrication and electronics manufacturing.
These include:
- 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
- Permission for domestic sales in the Domestic Tariff Area (DTA) upon payment of applicable duties
These regulatory changes have created a more conducive environment for Chip Fabrication investments and semiconductor manufacturing in India.
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Major Semiconductor SEZ Approvals Strengthen Chip Fabrication Value Chain
Following these reforms, the Board of Approval for SEZs has cleared several major proposals aimed at building India’s Chip Fabrication ecosystem and broader electronics manufacturing base.
Notably, Micron Semiconductor Technology India Pvt Ltd is setting up an SEZ in Sanand, Gujarat, focused on semiconductor Assembly, Testing, Marking, and Packaging (ATMP), with an estimated investment of ₹13,000 crore and projected employment generation of 20,786.
Similarly, Aequs Group is establishing an electronics component manufacturing SEZ in Dharwad, Karnataka, contributing to the supply chain supporting chip fabrication and semiconductor production.
Other approved projects include:
- Hubballi Durable Goods Cluster Private Limited (electronics components manufacturing and services)
- CG Semi Pvt. Ltd. (outsourced semiconductor assembly and testing)
- Kaynes Semicon Pvt. Ltd. (OSAT unit for semiconductor chips)
The flagship project remains the Tata Semiconductor Manufacturing Private Limited SEZ at Dholera, which involves an investment of ₹91,000 crore and is focused on an AI-enabled fabrication facility.
Building a Future-Ready Ecosystem
These SEZ developments are expected to catalyse the creation of domestic value chains, generate high-skilled employment, and reduce import dependence.
With increasing industry participation and sustained policy support, India’s Chip Fabrication ecosystem is steadily evolving into a globally competitive manufacturing hub.
The government stated that these initiatives will contribute to building a robust, resilient, and future-ready semiconductor ecosystem.
By facilitating integrated manufacturing clusters and strengthening domestic capabilities, India is positioning itself as an emerging global destination for Chip Fabrication and electronics production.
