From soil to silicon; that was how Odisha defined itself on this Republic Day. Contrasting with Bengal’s slower progress, once a powerhouse, the state’s policy-led shift from minerals to microchips seems to steer eastern India’s economic realignment.
On January 26, 2026, as India celebrated its 77th Republic Day, Odisha rolled out its tableau at Kartavya Path in New Delhi, adding to the annual visual spectacle that the country sees. The theme, ‘Soil to Silicon: Rooted in Tradition, Rising with Innovation’, symbolised the state’s development trajectory from its agrarian roots to the frontiers of high-tech innovation, particularly in semiconductors.
Amid the marching troops and military displays, Odisha stood as a symbol; a state historically defined by forests, minerals, and tribal culture, now finding its place in India’s high-tech future. The tableau featured a hand holding a semiconductor chip at its centre, surrounded by motifs from Odisha’s heritage, from the Konark Sun Temple to its tribal arts.
For decades, India’s regional economic debate revolved around a North-South divide, though figures like Defence Minister Rajnath Singh have refuted this, especially after Bengaluru’s rise as a tech hub post-1991 liberalisation. However, in recent years, the East-West divide has gained prominence, driven by the long-term stagnation of West Bengal. Is Odisha’s rise a reverse dynamic?
Odisha’s long arc of industrial ambition
Odisha’s pivot to electronics and semiconductors has not been sudden. It has been a gradual, strategic journey against all odds.
Why the odds? The eastern coast of Odisha, prone to cyclones, floods, and storm surges from the Bay of Bengal, has seen limited industrial growth due to these ecological challenges. Yet, the state built on its mineral wealth, forests, and tribal identity. It now appears to be leveraging these strengths toward more resilient, identity-driven economic growth, and semiconductors are central to this transition.
The state’s turning point came in 2016 with the ‘Make in Odisha’ initiative, aimed at transforming the state into a competitive investment destination across sectors. The second edition, in 2018, focused on infrastructure, ease of doing business, and sectoral involvement, laying the foundation for industrial parks, capacity building, and investment facilitation.
This was when electronics and IT received systematic government attention, setting the stage for future semiconductor growth.
In December 2021, the Odisha Electronics Policy 2021 was launched, marking the state’s first step toward electronics system design and manufacturing (ESDM). The policy offered financial incentives like fixed capital investment subsidies and production-linked incentives (PLI), as well as infrastructure benefits. It aimed to move Odisha’s manufacturing base from assembly to more value-added design and production, an ethos that would shape its semiconductor ambitions.
Policy 2023: making the semiconductor era
Odisha’s most ambitious move came in July 2023 when the Odisha Semiconductor Manufacturing & Fabless Policy-2023 was approved by the state cabinet. The policy projected at least one semiconductor manufacturing facility, 100-120 fabless design houses, 5000-6000 high-end direct jobs, and approximately 20,000 indirect jobs over a period of seven years.
It also included developing state-of-the-art infrastructure for advanced testing and EDA devices, developing industry-ready talent, producing at least 2 full-fledged chip designs per year, and providing an environment for future fabrication units. IPR 2022 concessional industrial land was accompanied by a 25 per cent discount on the first five mega projects (₹ 50 billion+), scaled subsidies for additional projects, and a 100 per cent stamp duty exemption. Capital was supported at 25-30% of CapEx, and for approved projects, the interest subsidy was set at no less than ₹250 million per annum.
The incentives included an exemption from the electricity duty, a ₹2/unit reimbursement on the power tariff over 10 years, and water at ₹7.65/m3 during the same period. SGST reimbursement was based on 100 per cent of the net tax monitored, up to 200 per cent of the plant and machinery expenditure. Fabless companies were seed-funded, with milestone reimbursements of up to ₹200-250 million and patent filing costs refundable up to ₹500,000 domestically and ₹1 million overseas.
The policy identified the sector’s skill intensity by sanctioning Electronics and VLSI undergraduate education in 25 institutes, consolidating M.Tech VLSI education, establishing a centralised grid of EDA tools, and offering 500 students per year an internship.
In November 2023, the state signed MoUs with key industry players, including the India Electronics and Semiconductor Association (IESA), Synopsys, and the Electronics and Computer Software Export Promotion Council (ESC). These collaborations supported capacity-building programmes, talent transformation, and ecosystem development.
In February 2024, the policy was amended, making it more investor-friendly: The 5-per cent interest subvention cap on mega projects was eliminated, R&D reimbursement of up to ₹20 million/year for 10 years, uninterrupted five-year PLI eligibility with a production window of seven years, and skills development refund of ₹20 million/year for five years were laid down.
Backing from the centre
Cut to August 2025. Odisha’s semiconductor ambitions reached a new milestone when the Union Cabinet approved two major projects under the India Semiconductor Mission (ISM).
One project, SiCSem Pvt Ltd, partnered with UK-based Clas-SiC Wafer Fab Ltd to establish India’s first commercial silicon carbide semiconductor fab in Bhubaneswar, investing ₹20.66 billion. This facility will produce 60,000 wafers and 96 million packaged semiconductors annually. The second project, backed by Intel, will set up an advanced packaging and 3D heterogeneous integration plant with a ₹19.43 billion investment.
At the same time, Odisha also launched the Electronics Component Manufacturing Policy-2025, aligning with the Centre’s Electronics Component Manufacturing Scheme (ECMS). This policy offers 50% capital subsidy for large-scale undertakings, land and rental assistance, and power tariff compensation, benefiting mega projects that invest ₹5 billion or more or generate over 1000 jobs.
Why Odisha and why now
Odisha’s semiconductor vision is now becoming a reality, particularly around Bhubaneswar and Khurda. Among ongoing projects, RIR Power Electronics is constructing a silicon carbide wafer fabrication plant in Info Valley, Bhubaneswar, with commercial production scheduled to begin in March 2026. SiCSem is establishing a semiconductor fabrication and assembly plant in Info Valley-II, Khurda, with operations expected to commence in 2027-28. 3D Glass Solutions Inc. is also setting up an advanced packaging unit in the same area, with groundbreaking scheduled for early 2026 and expected production in 2027.
In electronics manufacturing, TopTrack Hi-Tech PCB Pvt. Ltd. signed an MoU at SEMICON India 2025, aiming to begin operations by the end of 2026. Sancode Technologies is also establishing an advanced electronics and semiconductor facility in Bhubaneswar, partnering with global firms including Silicon Connect, APIRC, and Inari Amertron.
Odisha’s strategic advantages are clear. Its eastern ports: Paradip, Dhamra, and Gopalpur, connect inland markets to global trade. The state’s industrial estates, SEZs, and electronics clusters, along with its rail and road networks, reduce logistics costs. Investor-friendly policies and single-window clearances, coupled with facilitation by IPICOL, further enhance Odisha’s appeal. Furthermore, Odisha aligns with national priorities like Act East and Purvodaya, positioning itself as a gateway to Southeast Asia.
No longer the “poorer cousin” of Bengal?
Over the past decade, Odisha has transformed from a resource-based economy to a manufacturing and technology hub, underpinned by electronics, semiconductor, and component manufacturing policies.
It is not merely a coincidence or a matter of geography that Odisha is on the rise at the expense of West Bengal. It is more a conscious policy decision, implementation, and alignment with national priorities, rather than the slow modernisation in Bengal toward high-tech production.
West Bengal’s relative lag reflects structural and historical limitations. Once India’s industrial heartland, the region’s organised manufacturing development began to decline in the 1980s, and policy focus on traditional industries and services became fragmented.
Investor perceptions were further influenced by challenges in land acquisition, regulatory unpredictability, and the facilitation of large-scale industrial activities, all of which were accompanied by political unrest.
As of early 2026, West Bengal lacks a dedicated semiconductor policy. However, a draft policy was expected by February 2025, which includes incentives like reduced land costs, tax waivers, and skill development initiatives to attract fabs and ATMP investments. Officials have confirmed that it is linked to proposed projects, such as the GlobalFoundries ecosystem in Kolkata.
Studies have highlighted this shift as well. According to the Economic Advisory Council to the Prime Minister (EAC-PM), West Bengal’s GDP share fell from 10.5% in 1960–61 to 5.6% by 2023–24, with slower per-capita income growth. Meanwhile, Odisha’s GSDP reflects diversification beyond mining into metals, chemicals, electronics, and semiconductors, with industry and services accounting for nearly 80%.
Recent data show Odisha’s per-capita income has overtaken West Bengal’s, reversing a decades-old hierarchy and signalling productivity gains. As Sanjeev Sanyal, EAC-PM member, observed on November 4, 2024: “Odisha, on the other hand, which was always the poor cousin, now actually has a per-capita income higher than West Bengal.” He noted that local policies matter as much as national ones: Gujarat, Telangana, and Odisha are examples in which state-level implementation drove success, even under political constraints.
Reimagining the East-West divide
However, Odisha’s rise is not merely a function of West Bengal’s decline but a product of competitive federalism that rewards proactive states that provide policy certainty and long-term ecosystem thinking, rather than historical prominence. Odisha’s transformation challenges the idea that eastern India is doomed to lag behind.
It seems the sun is indeed rising in the east; this time, it glints off silicon.
