Fifty Per Cent of What?
India's semiconductor subsidy is quoted as a single number. Its controlling instruments use different cost bases and release support against eligible expenditure, with production obligations attached.
Evidence cut-off: 27 September 2026.
When Micron announced its Sanand semiconductor assembly and test plant in June 2023, the terms were two percentages against an announced project cost. Its audited accounts describe incentives "representing 50 % of the total project cost from the Indian central government and 20 % of the total project cost from the state of Gujarat". India's semiconductor mission puts the investment at "₹22,516 crore (2.75 billion dollars)" with "50 per cent fiscal support on pari-passu basis".[1]
If both percentages applied to all $2.75 billion, the residual would be $825 million.[2] That is an arithmetic illustration, not an approved payment. Its denominator is described as total project cost.
The scheme that sentence names does not use that phrase.
Two bases wearing one number
The gazette notification of 4 October 2022 that governs Micron's scheme class extends "a fiscal support of 50% of the Capital Expenditure" and defines Capital Expenditure itself.[3] The guidelines issued a week later narrow it: land "shall not be considered towards eligible capital expenditure"; expenditure before the application is acknowledged "shall not be considered"; what remains must fall within five years and be capitalised in the books; and the operative figure is finally whatever the applicant's approval letter says.[4] Across thirty pages of those guidelines the phrase "project cost" appears only inside the application form, twice and nowhere in an operative provision: once as "Total project cost including working capital requirements", a datum reported separately from the base on which support is computed, and once in a board resolution the applicant must furnish, for investing "the project cost towards setting up of the project": the applicant's own commitment, not a measure of the government's.
Tata's fab at Dholera sits under a different instrument, whose notification tabulates "Fiscal support as percentage of Project Cost" at "50 %".[5] Its guidelines do define Project Cost, at paragraph 2.12, and the definition is not the same one:[6]
Scroll across to compare both schemes.
| Cost head | Fab (Tata Dholera) | Assembly and test (Micron Sanand) |
|---|---|---|
| Buildings, plant, clean rooms, equipment, utilities, including used, second-hand or refurbished | in | in |
| Research and development | in | in |
| Transfer of technology | in, but licensing between JV partners excluded | in, no carve-out |
| Land | in, at the lower of state allotment rate or circle rate | expressly excluded |
| Interest during construction | in | no such head |
| Standalone insurance | in, at market norms | not a separate head |
Both chains end in an "eligible" figure fixed in an approval letter that is public for neither project. The fab definition names three extra heads, including land and construction-period interest.
Two conditions cut the other way. The fab's eligibility window opens later (from approval rather than application acknowledgement) and its guidelines exclude expenditure not routed through a No Lien Account.[7] Without the projects' approval letters and spending records, neither the eligible bases nor their shares of total outlay can be ranked. A greenfield assembly plant may spend little on excluded land and much on qualifying equipment; the denominator distinction could be economically small for Micron.
Official summaries use "project cost" and "eligible project costs" inconsistently; the controlling instruments and approval letters determine the base.[8]
What Gujarat actually promised
The state half of the arithmetic is stranger. The controlling instrument is a Government Resolution of Gujarat's Department of Science and Technology dated 27 July 2022. Its capital-assistance rate is 40 per cent, not 20; it is applied to the amount of central assistance, not to project cost. The strings "20%", "20 per cent" and "twenty" appear nowhere in the twelve-page document.[9]
On the natural reading of "40 percent ... of the capex assistance given by Government of India", forty per cent of fifty per cent reproduces Micron's reported twenty per cent. Gujarat's next sentence confines assistance to eligible capital expenditure, however, so its exact project-level computation cannot be proved from this resolution alone.[10] The resolution incorporates central eligibility by reference, "as amended from time to time"; the referenced 2021 guidelines are available here only as an unreadable scan. The later central ATMP guidelines exclude land.[11] The instruments describe the state share as additional.[12] Gujarat's clock starts at a state agreement, and its incentives are disbursed over five subsequent annual instalments.[13]
Gujarat also offers a 75 per cent subsidy on the first 200 acres for a fab and 50 per cent on additional land or other ISM-approved projects, restricted to the Dholera Special Investment Region unless extended elsewhere; and it offers stamp-duty reimbursement.[14] The central fab base already includes land at a capped valuation, while the central ATMP base excludes it. Whether Sanand received a separate land subsidy is unknown in the retrieved record.
So "the government pays seventy per cent" compresses a derived state rate, an eligible cost base, and separate land and stamp-duty benefits. It is no proof of an amount paid.
The trigger that changed
The December 2021 compound-semiconductor and ATMP scheme required commercial production to begin before support was released. The October 2022 modification instead allows pari-passu release after application approval, subject to its other conditions.[15] The release trigger moved from production to eligible spending.
Support is released pro rata after the company's corresponding share is deposited in a No-Lien Account, within approval-letter ceilings and against secured claims. Excess is refundable once commercial operation of the entire project is declared.[16] These are spending and safeguard conditions, not measured output targets.
The fab instrument similarly allows release against approved expenditure, but recipients must remain in commercial production for at least three years after the whole project starts production.[17] Its wafer-capacity threshold gates an application; it does not certify Dholera's output.[18] Production, employment and value addition are subjects of periodic review, without a numerical payment target in these guidelines.[19] A breach of scheme terms can trigger recovery, so the three-year undertaking matters.[20] The government's charge on fixed assets is released at commencement of commercial production.[21]
Nor does any of it ask for technological ownership. Eligibility across every manufacturing category is satisfied by owning or possessing licensed production-grade technology; used, second-hand and refurbished equipment is expressly eligible for support.[22] The one provision that touches the question directly does so sideways: the fab guidelines exclude from the subsidy base any cost of technology transfer or process licensing between JV partners.[23] That is a transfer-pricing control on the relationship, not a preference for domestic technology. In the entire fab instrument there is no domestic-content, local-sourcing or supplier-nationality condition.
The two examined scheme classes subsidise eligible capital formation at Indian sites without requiring domestic ownership of equipment, inputs or process technology. That design can add production capability through international partnerships. It does not, by itself, establish who controls technology or how resilient production would be to an interrupted foreign supply.
A payment the public cannot reconstruct
How much has actually been paid? The sources reviewed here do not establish a project amount. The published scheme material gives no project-level claims, and Micron's FY2025 filing does not break out Indian receipts.
The paying side budgets for the scheme "as a consolidated amount on regular basis and not on project-by-project basis".[24] Project-level claim records exist inside government (the nodal agency reports monthly), but nothing requires their publication.[25]
The receiving side pools too. Micron's FY2025 Form 10-K discloses the conditions, milestones and clawback of its Indian award only through a single sentence naming four jurisdictions together, while its US CHIPS agreements get two pages of specific terms and a dedicated critical audit matter.[26] Every incentive amount Micron actually recognises (asset reduction, income benefit, receivable, cash proceeds) is consolidated. There is no India-attributed figure anywhere for cash received, income recognised, or asset carrying value reduced.[27] The only India-dimensioned incentive number in the FY2025 filing is a remaining, unearned, conditional commitment of $1,491 million at 28 August 2025, stated to be in addition to amounts already received.[28]
Micron's filing puts two descriptions side by side. Its 10-K repeats that both rates apply to "the total project cost", while its accounting policy recognises incentive against "total expected qualified project cost", a revisable management estimate.[29] Two different bases, in one audited document.
The wedge cannot be measured without an approval letter. Seventy per cent of the announced $2.75 billion is $1,925 million, while Micron's FY2024 Form 10-K includes "$1.8 billion (150 billion Indian rupees)" for Gujarat among commitments to be received. It explicitly says those commitments are in addition to receivables and other assets already recognised.[30] Subtracting the two figures would compare an announced maximum with a later remaining commitment. It would reveal neither the eligible base nor under-spend; currency conversion and timing add further uncertainty.
India's long-lived assets on Micron's books were $449 million at 28 August 2025, or 0.95 per cent of its $47,326 million total. This is a depreciated carrying value, net of credited incentives and covering all India assets; it does not measure Sanand's spending.[31] Micron describes its Indian operations as component and module assembly and test, not wafer fabrication.[32]
Where the projects actually stand
At the cut-off, every operational unit among the twelve projects approved under Semicon 1.0 is an assembly and test unit, on the government's own classification. Not one of the three approved projects involving wafer fabrication is operating.[33] Dholera was reported as under construction on 17 September 2026 and nothing more; the ASML relationship remains a May 2026 partnership announcement with no definitive agreement, order, delivery or acceptance, and the Sumitomo instrument is itself a memorandum signed on 18 September 2026 to explore local materials manufacture.[34]
Micron's Sanand plant is running, and the distinction between what the company and the government say about it matters. Government releases say commercial production commenced; Micron's own quarterly filing says commercial shipments commenced and puts the production ramp in the future tense, a sentence it restated verbatim from one quarter to the next.[35] Realised output, shipment volume, qualified capacity and India capital expenditure are all undisclosed.
The official list in a 1 April 2026 parliamentary answer predates two approvals, and the September government releases disagree on whether three or five units have commenced commercial production.[36][37] The named five in the 17 September release and the mission's later statement support five within the approved-project set, but the conflicting release should remain visible. Announced capacities use incommensurable units and cannot be pooled.[38]
What would settle it
On 31 August 2026 the government notified Semicon 2.0. For the fab class the headline falls from 50% of "Project Cost" to 40% of "eligible capital expenditure"; for assembly and packaging, to 35% or 25%, while the minimum capital threshold rises twentyfold to ₹1,000 crore and a revenue threshold appears where there was none.[39] The notification has no definitions section, no transitional provision, no savings clause and no reference to the 2022 schemes, so what it does to existing approvals is unknown rather than unchanged.[40] It also contains the first clause in this family to condition money on domestic sourcing rather than domestic siting, though not for the plants this article is about. Category 4(d) pays makers of equipment, sub-assemblies and components for use in fabrication and packaging facilities, on their domestically sourced share, under a ceiling of 50 per cent of eligible capex; the fab and assembly classes carry no sourcing condition at all. It reaches the suppliers, not the plants the subsidy was built for: a production-linked incentive on the domestically-sourced share of bill-of-materials value, beginning FY2028-29.[41]
That clause shifts attention up the chain. The two earlier plant schemes examined here did not condition support on domestic sourcing. If the new supplier incentive is implemented as written, its payments will depend on domestic content. That is a distinct test from whether a fab or packaging plant was built in India.
Three observations would sharpen this audit: project-level payments, the approval letter setting each eligible base, and Dholera's first qualified wafer. None is established in the sources reviewed here. A published rate tells us much less than a published denominator and operating result would.