Official sources stated that the $11 billion (Rs 91,000 crore) manufacturing project of Israel-based Tower Semiconductor is now unlikely to be sanctioned until after the general elections.

This is due to the fact that in order to increase the present incentive cap of Rs 76,000 crore for domestic semiconductor manufacture, the Ministry of Electronics and IT (Meity) will need to first obtain Cabinet clearance. Up to now, the government has approved four semiconductor projects, and incentives totaling Rs 60,000 crore have been pledged.

The project from Tower Semiconductor is presently undergoing review. Companies whose applications are accepted via the procedure are eligible for a 50% government subsidy on the project cost. State governments have the liberty to supplement this sum with any desired level of subsidy after the projects are established.

Based on the scale of Tower's project, the government would be required to pay about Rs 45,000 crore of the project's total cost; however, as of right now, authorities stated, just Rs 16,000 crore remain in the subsidy fund.

Although the government provides subsidies for projects that are authorized over a number of years, officials advised seeking an increase in the expenditure before approving the project.

"Tower was the only proposal that was not brought before the Cabinet today, February 29. In a media conference last week, Rajeev Chandrasekhar, the minister of state for electronics and IT, stated that the government is looking into a very significant proposal and wants to successfully have it approved.

As opposed to a joint venture, Tower intends to establish a manufacturing facility here in the nation with a substantial monthly capacity of 80,000 wafers. It is anticipated that the business would investigate partnerships later on.

"According to the existing plan, we require two silicon fabs of higher nodes; the Tata-PSMC fab project is the first of them. Assembly, testing, marking, and packing (ATMP) factories are what we could need one or two more of, according to Ajai Chowdhury, chairman of the EPIC Foundation and co-founder of HCL.

As an advisor to the India Semiconductor Mission (ISM), Chowdhury stated, "We will definitely see additional funding coming in for this area beyond the Rs 76,000 crore," as semiconductors are a 20-year goal.