India Set to Strengthen Semiconductor Ecosystem with ₹1.25 Lakh Crore ISM 2.0

India is preparing to significantly expand its semiconductor ambitions with the proposed India Semiconductor Mission (ISM) 2.0, which has received clearance from the Expenditure Finance Committee. The programme, carrying a proposed outlay of ₹1.25 lakh crore (around US$13.21 billion), now awaits approval from the Union Cabinet.

The new mission represents a major increase from the ₹76,000 crore allocated under the first phase and was announced as part of the Union Budget 2026–27. ISM 2.0 is designed to accelerate the development of a complete semiconductor ecosystem, covering chip design, manufacturing, semiconductor equipment, raw materials, indigenous intellectual property, and resilient supply chains.

According to Union Electronics and IT Minister Ashwini Vaishnaw, the next phase will place greater emphasis on indigenous chip design, product development, talent creation, and attracting global ecosystem partners to strengthen India’s role in the global semiconductor value chain.

The first phase of the mission has already laid the foundation for the sector’s growth. The government has approved 12 semiconductor manufacturing projects involving investments worth approximately ₹1.64 lakh crore, including one semiconductor fabrication plant, two compound semiconductor fabrication facilities, and nine chip packaging units.

Progress has also been made in semiconductor design through the Design Linked Incentive (DLI) Scheme, with 24 projects receiving support. Additionally, 105 companies have been provided access to advanced chip design tools, while 23 chip tapeouts have been successfully completed across manufacturing facilities.

Commercial production has already begun at two semiconductor projects, with CG Semi expected to be inaugurated on July 4, 2026. Several additional facilities are scheduled to become operational later this year, marking another milestone in India’s efforts to establish a robust domestic semiconductor manufacturing industry.