Machines Made in India

The plan

1. The best place on earth to keep a profit.

   • No corporate income tax, no capital gains tax and no tax on dividends (Chapter 1). A machine maker pays the bank transaction tax, the 0.4% property tax and the flat 10% GST with full input credit, so a machine bought by a factory carries no net GST.
   • Every import, from a finished machine to a wafer of silicon, pays the same 5% duty. There are no product-by-product exemptions and no duty refunds to negotiate.
   • A new plant self-registers on the one Business ID and starts work (No licence raj). A fab or plant that stores hazardous gases or chemicals above the set quantities is on the critical list and is decided within 90 days with written reasons. Strict liability and third-party insurance apply to every plant.
   • Fast depreciation, tax holidays and tax credits do not apply, because there is no income tax to reduce. The US CHIPS and Science Act of 2022 paired $39 billion of manufacturing grants with a 25% investment tax credit on fab equipment; in India every rupee of profit is already free of income tax.

2. The state as first buyer, at a published price.

   • Every public buyer (Railways, the armed forces and defence units under Chapter 17, power utilities, ISRO, public-sector firms and the builders on Chapter 20 work packages) publishes a 5-year purchase plan for machine tools, robots, automation systems and chips in the first 30 days.
   • Each product class has one published fixed price, set as the median of 3 independent cost consultancies' estimates and never above the latest landed price of an imported equivalent (How the government buys). Any certified Indian maker who posts a performance bond can supply at that price. Payment follows inspection, within 30 days, or the buyer pays 1.5% a month interest.
   • Where at least one certified Indian maker supplies a class at or below the import price, public buyers and their contractors buy that class from certified Indian makers. Where none exists yet, they buy openly, and the class is published as an open opportunity.
   • Guaranteed first order (Chapter 17 model). The first certified Indian product in a new class, such as a five-axis machining centre, a six-axis industrial robot, a fab tool or a power chip, gets an order within 30 days of certification: at least 3 times the prototype value or ₹25 crore, whichever is higher. If 2 or more products pass, the order is shared equally.

3. One open quality test at the European bar (the Aadhaar playbook).

   • The Bureau of Indian Standards and the Quality Council of India publish one open specification for machinery and robots in the first 30 days, mapped clause by clause to the essential health and safety requirements of the EU Machinery Regulation (Regulation (EU) 2023/1230) and the harmonised standards behind the CE mark, such as ISO 10218 for industrial robots and ISO 13849 for safety controls.
   • Any NABL-accredited lab, public or private, certifies a model after a published test at a published fee. The maker self-registers each model with its test report and the share of value added in India, and the full file is public.
   • 2% of certified units are re-tested at random each year by a lab assigned through the faceless system (Chapter 13). A failed model is de-registered within 7 days, and the maker loses certification for that model for 1 year.
   • Within 1 year, the same bar applies to every machine sold in India, made here or imported. The gap that remains between the Indian rules and the EU Regulation is published each year until it closes (Europe for quality of life, America for capitalism).
   • Chips follow open international qualification standards (for example JEDEC for memory and AEC-Q100 for automotive chips), tested in Indian labs.

4. A sector city for chips and advanced machines.

   • A sixth sector city, for semiconductors and advanced machines, is chosen by the same published score as the five strategic sector cities (item 9). The existing Dholera and Sanand cluster in Gujarat, with the Tata and PSMC fab (₹91,000 crore, 50,000 wafer starts a month), Micron's assembly and test plant (over ₹22,500 crore, in production since February 2026) and CG Power's assembly plant, is a likely leader for chips; a second node for machine tools and robots is chosen by the same formula, from the existing machine-tool belts such as Bengaluru, Pune and Coimbatore.
   • Land goes by open auction under the Chapter 7 ready-plot rule. Firm power is supplied at the one published tariff (Chapter 19), and fabs draw ultrapure water from treated, recycled city water. Permits are replaced by self-registration, apart from the critical list.
   • Shared clean rooms, metrology labs and robot test cells open to private booking at published hourly rates, run by certified operators paid per verified booking-hour.

5. Commercial co-investment, never a grant.

   • The manufacturing and energy sleeve of the Bharat Growth Fund of Funds (Chapter 16) backs robot, automation and machine-tool start-ups through SEBI-registered venture funds, with private investors holding at least 70% of each fund.
   • For large plants such as fabs and assembly and test units, NIIF takes minority equity of up to 26% on the same terms and at the same price as the private investors, and sells within 10 years. One illustration: ₹25,000 crore committed over 5 years from NIIF's own corpus and from sale proceeds after year 1, outside the ₹4 lakh crore of year-1 sales that Chapter 12 already assigns (estimate).
   • Signed India Semiconductor Mission approvals are honoured exactly as signed (no retrospective laws). New capital grants end on the switch day, and new projects use the levers in this annex.

6. Trusted chips and critical machines (Sovereignty first).

   • Chips, control systems and the machines that make classified defence parts, when they go into Tier 1 and Tier 2 systems (defence, the grid's control centres, telecom core networks, the payment rails), come only from Indian-controlled makers: Tier 1 rules for classified defence production, and Tier 2 rules (at least 74% Indian ownership, an Indian board majority, a resident Indian chief executive and chief security officer) for trusted fab and assembly lines.
   • Parliament adds "trusted chip fabrication, assembly and test lines supplying Tier 1 and Tier 2 systems" to the Tier 2 list by Act, after review by the National Security Council Secretariat.
   • Foreign firms are welcome as technology licensors, equipment suppliers and minority investors, as PSMC is the technology partner for Tata's fab. Commercial fabs and plants that serve the open market stay fully open to foreign ownership under Chapter 10, as Micron's Sanand plant is.

7. Outcome payments, open to all and checked against the no-subsidy rule.

   • Trusted wafer contract. The state is a buyer of chips for its own Tier 1 and Tier 2 systems. It publishes a fixed price per accepted wafer (or per packaged chip) from a certified trusted line, set at the median of 3 independent cost estimates and at most 20% above the latest import price; the 20% is the published price of guaranteed supply in a crisis. Any certified trusted line can sign. The window to sign closes at the end of year 5, and each contract runs up to 10 years. Payment is made only for wafers delivered and accepted.
   • Why this passes the no-subsidy rule. The state pays for goods it takes and uses, at a published price open to every certified firm, exactly as it buys a road under Chapter 20. Nothing is paid for a plan, for capacity that is idle or for output the state does not receive.
   • What is left out. A payment per robot exported is an export subsidy, banned under the WTO Agreement on Subsidies and Countervailing Measures, and breaks the no-subsidy rule. A payment per unit of fab capacity, not tied to the state's own purchases, is a production subsidy. Neither is used.

8. People for the new plants. Technician, robot-programming and clean-room courses are offered by any registered institution under Chapter 15, each publishing audited job outcomes, and student loans follow the best results. Every certified maker can run apprenticeships on the German dual model.

Sector cities for defence, space, biotech, materials and nuclear: where buyers meet builders

9. Five sector cities, chosen by a published score. The weights are fixed before any state submits data:

10. Build on what exists. Likely leaders on the score, subject to the count: defence, a Uttar Pradesh or Tamil Nadu corridor node; space, Bengaluru with Sriharikota; biotech, Hyderabad; materials, the Odisha and Jharkhand steel and minerals belt; nuclear, near Kalpakkam or Tarapur.
11. Buyers and decision power move, policy stays. Within 12 months, each sector's operating bodies move their headquarters to the city: for example DRDO's headquarters cluster, the Department of Biotechnology's autonomous institutes and the Department of Atomic Energy's operating wings. The ministry wing that approves and buys for that sector moves too, led by an Additional Secretary with full financial powers. Only units that pass the Chapter 12 function test move.
12. What stays in Delhi. One policy and Parliament cell of up to 50 people per ministry, including the minister's office. Cabinet and parliamentary work stays where Parliament sits. Files move on a shared secure e-office, so nothing waits for a courier.
13. One rule, no special deal. City land is sold or leased by open auction under the Chapter 7 ready-plot rule, at no concessional price. Power is supplied at the one published tariff for that consumer class (Chapter 19). Permits follow the same self-registration rule as everywhere (No licence raj). A state may compete on readiness (clean title, roads, power lines), never on discounts; any discount offered scores zero.
14. Shared test facilities. In each city, one existing government facility (a DRDO range, a BARC or IGCAR test loop, or an ICMR or DBT BSL-3 lab) opens to private booking at published hourly rates by month 12. New ranges, clean rooms and labs are built as published work packages at the national rate card, with the builder's bond posted upfront and payment only after independent inspection (How the government buys). Any certified operator runs them, paid per verified booking-hour.
15. Anchor demand. Each lead buyer (Ministry of Defence, ISRO, DAE and so on) publishes a 5-year forward purchase plan and pays suppliers within 30 days (Chapter 17). The first certified product in a new field gets a guaranteed first order, as in item 2.

Cost and return

• Who pays: public buyers from their existing budgets; NIIF from its own corpus and from sale proceeds after year 1, outside the year-1 sales Chapter 12 assigns to the Transition Buffer and the Chapter 16 fund; makers for their own tests. For the sector cities, the Centre pays for relocation and test facilities; states supply serviced land at auction value; private developers build offices and housing on 30-year leases.
• Relocation per person: ₹5 lakh moving grant + 12 return trips × ₹10,000 (₹1.2 lakh) + ₹8.8 lakh housing lease and allowance for the year.
• Return (estimate): electronics imports were $116.17 billion in FY26. Every 10% made at home is about $11.6 billion, about ₹1.1 lakh crore a year of Indian output at ₹94.5 to the dollar.
• Robots: India installed a record 9,120 industrial robots in 2024, sixth in the world, with about 52,570 at work (IFR). Korea runs about 1,220 per 10,000 manufacturing workers, against a world average of about 132.
• Machine tools (estimate): India consumed about ₹31,781 crore of machine tools in FY25, produced ₹14,566 crore and imported ₹18,686 crore. Raising the share made at home from about 41% ((₹14,566 − ₹1,472 exports) ÷ ₹31,781) to 60% at FY25 demand adds about ₹6,000 crore a year of Indian output.
• Sector city return (estimate): if the share of corridor commitments that reaches the ground rises from about 15% to 40%, closer to what Genome Valley achieves, the defence corridors alone add about ₹18,700 crore of real investment (₹74,756 crore × 25 points).
• Sector city jobs (estimate, after year 1): 5 cities × 20,000 direct jobs over 3 years = 1 lakh direct jobs, about 3 lakh including indirect jobs at a multiplier of 3.

Timeline

First 30 days:

• Publish the open machinery and robot specification, mapped to the EU Machinery Regulation, and the list of accredited labs.
• Every public buyer publishes its 5-year purchase plan and the published price for each class.
• Publish the score for the sixth sector city and the trusted-chip rule; table the Tier 2 amendment in Parliament.
• Publish the trusted wafer contract terms and the NIIF co-investment terms.
• Publish the sector city scoring formula, data sources and weights. Every state submits its data within 21 days. An independent panel (Quality Council of India and 3 IITs) scores the bids, and the 5 strategic sector cities are announced on day 30 with every state's full score sheet.
• Each lead ministry publishes the list of units that move (after the Chapter 12 function test) and names its Delhi cell.

Within 1 year:

• At least 3 accredited labs certify machines and robots; the first certified Indian machines are bought at published prices.
• The sixth sector city is chosen, with ready plots on auction and shared clean rooms and test cells open to booking.
• The same European-level bar applies to every machine sold in India, and the remaining gap is published.
• The first NIIF co-investments close; the Chapter 14 scorecard reports, each quarter, the share of public machine and chip purchases made in India and the machine-tool and electronics import shares.
• In the five strategic sector cities, units move into leased ready offices by month 9 and are fully working by month 12. One existing test facility per city is open to private booking at published rates; new facilities are under construction at the national rate card. Each lead buyer's 5-year purchase plan is published, and the Chapter 14 scorecard reports, for each city, investment on the ground, firms located and jobs.

Outcomes after year 1: India's first commercial fab produces wafers; Indian robots and machine tools win certified orders at home and sell in Europe; the share of machine tools made at home passes 60% by year 5 (estimate); purpose-built sector city campuses and new test ranges are complete in 2 to 3 years, and the 1 lakh direct jobs build up over 3 years (estimate).

Guardrails

• The state pays only for a certified product delivered and accepted, or for equity at the same price as private investors. Every payment, order and stake is published by firm within 7 days.
• Local value added is declared by the maker for each model and checked by a randomly assigned auditor. A false declaration means loss of certification for 3 years, repayment of every order premium with 1.5% a month interest, and personal liability for the directors.
• The published price never exceeds the latest landed import price, except for the trusted wafer premium of at most 20%, which ends with each contract.
• Every machine and robot sold in India carries strict liability and third-party insurance from the published table by risk class. A death or serious injury caused by a defect means a field audit of the model within 7 days.
• Trusted lines file their full ownership chain every quarter; a hidden foreign-state link means a forced sale within 90 days and loss of every trusted contract.
• No cap on size: the same price, contract and co-investment terms apply to every certified firm.
• The sector city score formula stays fixed once bids open. The Cabinet may pick a city other than the top scorer only with written reasons laid before Parliament within 7 days.
• No single site holds more than 40% of India's critical capacity in any defence or nuclear line. A second node at least 500 km away is chosen by the same formula.
• Officials move only into ready housing with school places confirmed. Each gets the ₹5 lakh grant and 2 return trips a month for the first 6 months. Staff who decline may transfer to an equivalent post elsewhere with no penalty.
• The Additional Secretary in each sector city signs off up to ₹500 crore without Delhi's approval. The CAG checks every quarter that files stay with the city; more than 10% routed back to Delhi triggers a published explanation within 30 days.
• Nuclear city zoning follows AERB siting rules (1.6 km exclusion zone, 5 km sterilised zone) with no relaxation.
• Each test facility operator reaches 60% booked use a year, or the operating certificate passes to the next certified operator.
• If less than 25% of committed investment in a sector city has started (contract signed and site work begun) at month 12, the city package is reviewed and unused auctioned land is released for any other use.

Legal route

• Taxes and duty: the Chapter 1 Finance Act.
• Public purchase: amend the General Financial Rules, 2017, to replace lowest-bid tenders with published prices for these classes (Chapters 17 and 20), and replace the Public Procurement (Preference to Make in India) Order with the certified-maker rule. India is not a party to the WTO Agreement on Government Procurement, so a purchase rule for its own buyers is open to it.
• Quality: Quality Control Orders under the Bureau of Indian Standards Act, 2016, applying the open specification to every machine sold in India.
• Sovereignty: the Tier 2 addition by Act of Parliament; GATT Article XXI security exceptions for the trusted-chip rule.
• Outcome payments: the trusted wafer contract is a purchase by the state of goods for its own use, under the General Financial Rules.

Limits to know

A fab takes several years to build and qualify, so the first Indian wafers at scale arrive after year 1. India begins with mature chip nodes and assembly and test; the most advanced nodes stay with a handful of firms abroad for some years, and India buys them as a confident partner. Robots and machine tools still depend on some imported precision parts, such as reducers, servo motors and controllers, which become the next published opportunity list. The EU Machinery Regulation applies in Europe from January 2027, so the Indian mapping follows its final harmonised standards as they are published. Purpose-built sector city campuses and new test ranges take 2 to 3 years to build; the year-1 path is relocation into ready leased space plus one existing facility per city opened to private booking.

Sources: Electronics imports $116.17 billion in FY26, Commerce Ministry data, The Week · Tata and PSMC Dholera fab ₹91,000 crore, ATMP units, ISM ₹76,000 crore, Micron Sanand, PIB · Micron Sanand assembly and test plant opened 28 February 2026, over ₹22,500 crore, Digital Terminal · Machine tool production, consumption and imports FY25, IMTMA · Robot density 2024: Korea 1,220 per 10,000, IFR · India 9,120 robot installations in 2024, sixth in the world, Tribune · German machine tool production €14.8 billion in 2024, VDW · TSMC founded 1987 with ITRI, government 48.3% and Philips 27.5% · CHIPS and Science Act $52.7 billion, 25% tax credit · EU Machinery Regulation 2023/1230 applies from 20 January 2027, EU-OSHA · Defence corridor commitments and investment on the ground, April 2026, Business Today · Defence production ₹1.51 lakh crore FY25, Tribune · Telangana life sciences ₹36,000 crore and 51,000 jobs, Telugu Times · 440 space startups, News on AIR · Space economy $44 billion by 2033, ThePrint · Bio-economy $165.7 billion in 2024, BioSpectrum · Sejong "too far away", Korea JoongAng Daily · Berlin/Bonn Act · CBRE: Genome Valley · Nuclear siting zones, DAE · Stanford: the Stanford Research Park story · Stanford Research Park, Wikipedia