Intel unit may get SEZ status

Company negotiating with govt for more incentives.

Global chip manufacturer Intel's proposed assembly testing facility in India is likely to get the status of a special economic zone (SEZ).

The company is currently negotiating with the government for additional sops. The assembly testing facility is likely to be set up in Tamil Nadu with an initial investment of around $300 million.

"Intel will set up the unit as a special economic zone as it wants to avail of the direct and indirect tax concessions that are available to this zone," an official said, adding that the government had made it clear to the company that it would not extend any concessions outside the SEZ.

The company is seeking benefits in addition to those available to the SEZs in India on the ground that the high cost of land and power and a high wage rate are coming in the way of making its investment viable.

Officials said the land issue was more or less sorted out as the state government was considering making land available free of cost for the project.

The company has identified around 120-150 acres of land near Chennai for setting up the facility. It is seeking an unsecured loan of Rs 200-crore from the government along with other concessions such as unlimited access to external commercial borrowings and tax waivers.

The company has conveyed that it was willing to begin due diligence and was targeting to complete the negotiations by March 2006 and set up the facility in the second-quarter of this calendar year.

Last September, the company had informed the Centre that it was putting its plans for setting up the wafer testing facility on hold following the Centre's reluctance to grant exclusive incentives.