Rajasthan Launches Semiconductor Policy for Bhiwadi Chip Hub

Rajasthan Enters the Semiconductor Policy Race

The Government of Rajasthan has introduced a dedicated Rajasthan Semiconductor Policy in March 2026, formally positioning the Bhiwadi-Khushkhera industrial belt near the Delhi-NCR conurbation as a major electronics and semiconductor manufacturing hub. The policy was developed in response to the growing competition among Indian states to attract semiconductor investment, and was timed to complement the concurrent inauguration of Sahasra Semiconductors' packaging facility in Bhiwadi, Rajasthan's first semiconductor chip manufacturing unit, which was opened in May 2026 under the central government's SPECS scheme.

Policy Incentives and Infrastructure Commitments

The Rajasthan Semiconductor Policy offers a package of incentives designed to compete with the well-established semiconductor attraction programs of Gujarat and other states. Key provisions include a 50 percent land subsidy for semiconductor manufacturing facilities in the designated Bhiwadi-Khushkhera semiconductor zone, preferential electricity tariff arrangements for cleanroom-class manufacturing operations, guaranteed water supply infrastructure for semiconductor packaging and assembly processes, and fast-track environmental and building clearances targeting a 30-day decision timeline for qualifying projects. The state government has also committed to providing dedicated cleanroom infrastructure support and industrial utilities at the Bhiwadi site.

The Bhiwadi-Khushkhera Location Advantage

The Bhiwadi-Khushkhera belt offers geographic advantages distinct from Gujarat's Sanand cluster: proximity to the Delhi-NCR region provides access to India's largest corporate procurement market, connectivity to Indira Gandhi International Airport for air freight of semiconductor packages, and proximity to a large engineering talent pool in the National Capital Region. The existing electronics manufacturing ecosystem in the belt, including assembly operations for consumer electronics and automotive components, provides a ready customer base for semiconductor packaging services.

Building on Sahasra's First-Mover Position

The Rajasthan policy builds on the proof of concept provided by Sahasra Semiconductors' Bhiwadi ATMP facility, which began commercial production in May 2026 and is already exporting over 60 percent of its output. The state government is positioning Sahasra as an anchor tenant that demonstrates the viability of semiconductor manufacturing in Rajasthan, hoping to attract additional packaging, testing and materials companies to the Bhiwadi zone over the next three to five years.

SME Semiconductor Focus

Unlike Gujarat's focus on large-scale ISM investments from multinational companies, Rajasthan's semiconductor policy explicitly targets SME-scale semiconductor manufacturing investments in the ₹100 crore to ₹500 crore range, where the SPECS scheme incentives and state-level subsidies can make projects commercially viable for Indian medium-sized industrial companies with electronics manufacturing experience that want to add semiconductor packaging capability to their operations.

Implications for India's Semiconductor Geography

Rajasthan's entry into the semiconductor attraction competition adds a sixth state to India's semiconductor manufacturing geography, alongside Gujarat, Odisha, Andhra Pradesh, Punjab and Karnataka. This multi-state buildout distributes semiconductor manufacturing risk, creates competition that drives improvement in state-level incentive quality, and ensures that India's semiconductor ecosystem is geographically resilient, not concentrated in a single state vulnerable to localised policy changes or natural disaster risks.