UP Cabinet Clears Big-Ticket Sops to Woo Semiconductor Majors, Signals Manufacturing Push

Uttar Pradesh is quietly but decisively positioning itself for the next big wave of India’s manufacturing story. In a Cabinet meeting chaired by Yogi Adityanath, the state government has approved a fresh set of incentives aimed at attracting semiconductor companies willing to invest ₹3,000 crore or more—an unmistakable signal that the state wants a seat at the global high-tech manufacturing table.

The decision comes at a time when India is racing to build a domestic semiconductor ecosystem and global companies are actively scouting for new, reliable destinations beyond traditional hubs like Taiwan, Japan, Europe and the US. Uttar Pradesh, often associated with scale rather than cutting-edge manufacturing, now wants to change that perception.

A Cabinet Meeting with a Clear Economic Focus

Briefing the media after the meeting, Finance Minister Suresh Kumar Khanna said that 14 proposals were placed before the Council of Ministers. Of these, one was deferred, while 13 proposals received the Cabinet’s nod—underscoring the breadth of decisions taken in a single sitting.

At the heart of these approvals was the state’s push to operationalise its semiconductor policy, which was introduced in January 2024. Unlike a one-size-fits-all approach, the policy allows for case-by-case incentives for companies making large, long-term investments—particularly those committing ₹3,000 crore or more.

What the Semiconductor Incentives Include

The approved package is designed to reduce both capital and operational costs for semiconductor firms, which are known for heavy upfront investment and long gestation periods. The incentives include:

• Interest subsidy to lower financing costs

• Employee cost reimbursement, easing the burden of building large skilled teams

• GST exemptions for 10 years, providing long-term tax certainty

• Power tariff subsidy of up to ₹2 per unit for a decade, a crucial factor for energy-intensive manufacturing

In addition, the state will offer 100% reimbursement of EPF contributions for Uttar Pradesh–based professionals, capped at ₹2,000 per month, along with concessions in water charges.

According to Khanna, the intent is clear: to attract major global semiconductor players and position Uttar Pradesh as a preferred investment destination in a sector that is currently dominated by a handful of global regions.

Global Ambitions, Local Jobs

Beyond the headline investment numbers, the government is emphasising employment generation. Semiconductor fabrication, packaging, testing and allied units can create large ecosystems of direct and indirect jobs—from engineers and technicians to logistics, construction and services.

Industrial Development Minister Nand Gopal Gupta told reporters that multinational companies are already showing growing interest in the state. He added that standard operating procedures for Global Capability Centres (GCCs) were also approved, further strengthening Uttar Pradesh’s pitch to global firms looking to set up large offshore operations.

Gupta said that 21 companies have already begun investments in the current financial year, which are expected to generate significant direct and indirect employment across sectors.

Relief on Stamp Duty for Family Property Transfers

In another decision with wide public impact, the Cabinet expanded a 2022 policy that capped stamp duty at ₹5,000 on property transfers within families. Stamp and Revenue Minister Ravindra Jaiswal said that this benefit, which was earlier limited to residential and agricultural properties, will now extend to commercial properties as well.

The revised rule will apply in both rural and urban areas, as long as the property is gifted within the family—offering relief to small business owners and families managing intergenerational assets.

A Major Healthcare Boost for Varanasi

The Cabinet also cleared the establishment of a 500-bed multi-super speciality hospital in Varanasi, to be built at the site of the Shiv Prakash Gupta divisional district hospital. The project is estimated to cost ₹315 crore and will be completed over four years.

As per the approved plan, 60% of the project cost will be borne by the Centre, with the remaining funded by the state government. Once completed, the hospital is expected to significantly strengthen advanced healthcare infrastructure in eastern Uttar Pradesh.

A Broader Signal from the State

Taken together, the Cabinet decisions reflect a broader strategy: attract high-end global manufacturing, reduce friction for large investors, create jobs at scale, and simultaneously address everyday governance and social infrastructure needs.

For India’s startup and technology ecosystem, Uttar Pradesh’s semiconductor push is worth watching closely. If even a handful of large semiconductor projects take root, it could reshape the state’s industrial profile—and add a new geography to India’s emerging chip manufacturing map.