The Assam government has announced that the Jagiroad Semiconductor Project is expected to generate 27,000 jobs, while simultaneously confirming the closure of four loss-making Public Sector Undertakings (PSUs) without resorting to privatisation. The announcement was made in the Legislative Assembly, underscoring the state’s dual strategy of fostering high-tech industrial growth and streamlining its public sector.
This development highlights the government’s commitment to boosting employment through large-scale industrial investments and improving fiscal health by disengaging from non-performing state-owned enterprises. The semiconductor project, a significant step towards positioning Assam as a hub for advanced electronics manufacturing, is poised to transform the region’s economic landscape.
What was announced
The Assam government informed the Legislative Assembly on July 9, 2026, that four Public Sector Undertakings (PSUs) operating at a loss have been shut down. Concurrently, the government stated that the upcoming semiconductor project in Jagiroad is projected to create 27,000 direct and indirect employment opportunities within the state. Officials clarified that the decision to close the PSUs was taken without any plans for their privatisation.
Why it matters
The projected creation of 27,000 jobs from the Jagiroad Semiconductor Project represents a substantial boost to employment in Assam, particularly for skilled youth. This initiative aligns with the state’s broader vision of becoming a US$150 billion economy by 2030 and diversifying its economic base beyond traditional sectors. The closure of loss-making PSUs, without privatisation, reflects the government’s resolve to address financial inefficiencies and reallocate resources more effectively, a policy stance articulated by Chief Minister Himanta Biswa Sarma previously.
Background
The Jagiroad Semiconductor Project, formally known as the Tata Semiconductor Assembly and Test (TSAT) facility, represents a significant investment of approximately INR 27,000 crore (around US$3.6 billion). The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the project on February 29, 2024, under the India Semiconductor Mission, a INR 76,000 crore incentive programme aimed at strengthening domestic chip manufacturing. The foundation stone for the facility was officially laid on August 3, 2024, with Chief Minister Himanta Biswa Sarma and Tata Sons Chairman N Chandrasekaran in attendance.
Chief Minister Sarma has consistently advocated for a shift away from establishing new public sector industries, emphasising instead a focus on education, health, and other social welfare sectors. In August 2023, he announced plans to close financially struggling state-run entities, stating that employees would be “relieved from their jobs with honour.” The state’s Public Enterprises Policy, 2019, also outlines provisions for considering the closure or outright sale of perpetually loss-making PSUs in non-priority sectors, subject to Cabinet approval. Records indicate a history of PSU closures in Assam, with 13 of 23 public sector industries closed since 2006, and four older entities becoming inactive or shut down since 2016.
Key details
The Tata Semiconductor Assembly and Test facility in Jagiroad, located in the Morigaon district, is designed to produce up to 48 million semiconductor chips daily. It will utilise advanced packaging technologies such as flip-chip and Integrated System in Package (ISIP). These chips are intended for critical sectors including automotive, electric vehicles, telecommunications, consumer electronics, and artificial intelligence hardware.
To ensure a skilled workforce for the project, the Assam government has partnered with the Tata Group for specialised skill-development programmes. Plans are also underway to establish a National Institute of Electronics and Information Technology (NIELIT) centre to create a pipeline of skilled professionals. Furthermore, the state government has implemented a 15-kilometre pollution-control buffer zone around the Jagiroad facility to protect it from environmental contamination, as semiconductor manufacturing requires an extremely clean environment.
What’s next
Union Electronics and Information Technology Minister Ashwini Vaishnaw announced in June 2026 that the Jagiroad semiconductor plant is expected to commence production within the current financial year. Chief Minister Sarma, following a visit to the site in May 2026, expressed satisfaction with the progress and indicated that production would begin “very soon,” marking the official rollout of “Made In Assam” semiconductor chips. The state government continues to focus on creating a business-friendly ecosystem, as evidenced by recent decisions to allow small, non-polluting enterprises to operate for up to three years without prior government approvals.