Semicon 2.0 Could Catalyse Over ₹5 Lakh Crore in Semiconductor Investment, Says IESA

India’s newly notified Semicon 2.0 programme could catalyse more than ₹5 lakh crore in cumulative private and industry investment over the next five to seven years, according to the India Electronics and Semiconductor Association (IESA), as the country moves into the next phase of building a domestic semiconductor ecosystem.

IESA welcomed the government’s formal notification of Semicon 2.0 on 31 August 2026, saying the programme could deepen India’s semiconductor capabilities, attract large-scale investment, generate high-value employment and strengthen the country’s position as a trusted participant in the global semiconductor supply chain.

The government has provided ₹1.27 lakh crore for Semicon 2.0, substantially expanding India’s semiconductor-development programme. The initiative covers the semiconductor value chain from chip design and wafer fabrication to packaging, equipment, materials, research and development and workforce creation. It will operate through six pillars covering ten categories, with projects generally eligible for support for up to six years.

IESA President Ashok Chandak said India was moving from establishing credibility in semiconductors towards building deeper technological and manufacturing capabilities. He pointed to progress under the first phase, including 12 approved semiconductor projects, support for more than 100 design startups and access to Electronic Design Automation tools across more than 355 institutions and for around 60,000 students.

The ₹5 lakh crore projection is particularly significant because it refers to investment that could be mobilised across the wider industry rather than government expenditure alone. Semiconductor fabrication plants require extensive supporting industries ranging from speciality chemicals, gases and substrates to precision machinery, testing, packaging, power infrastructure and clean-room equipment. Expansion of these supporting sectors could multiply the economic impact of the government’s initial incentives.

Semicon 2.0 is also being aligned with programmes including the Electronics Components Manufacturing Scheme, electronics manufacturing clusters and other electronics-production initiatives. IESA believes this wider policy framework could raise domestic value addition, bring global suppliers into India and create new opportunities for Indian startups and MSMEs.

India has simultaneously accelerated semiconductor workforce development. The government says the country achieved its earlier target of training 85,000 semiconductor engineers in four years, rather than the originally envisaged ten years, and has now set a target of developing another one lakh engineers. Students from Tier-II and Tier-III cities have already designed more than 250 chips using design infrastructure made available through the programme.

The government expects the expanding semiconductor ecosystem to generate approximately 50,000 to 60,000 direct jobs, apart from employment created across electronics manufacturing, equipment, materials and supporting industries. India Semiconductor Mission will serve as the nodal agency for evaluating applications and overseeing implementation of Semicon 2.0.

The larger objective is to move India beyond being primarily a major electronics-manufacturing market towards becoming a country capable of designing, manufacturing and eventually owning critical semiconductor technologies. If IESA’s investment projection materialises, Semicon 2.0 could trigger an industrial expansion considerably larger than the government’s direct ₹1.27 lakh crore programme outlay and establish semiconductors as one of India’s most important strategic manufacturing sectors over the coming decade.