Hyderabad: The Union Budget 2026–27 marked a decisive push towards chip self-reliance with the launch of India Semiconductor Mission 2.0, supported by a ₹1,000 crore allocation for the year.
The government said India Semiconductor Mission 2.0 would deepen domestic capabilities across semiconductor equipment, materials and full-stack chip design. At the same time, it would strengthen supply chains and expand industry-led research and training centres.
Semiconductors remain critical to modern economies. They power electronics, telecom networks, automobiles, defence platforms and artificial intelligence systems. Therefore, officials said the new phase built directly on the groundwork laid under ISM 1.0.
Under ISM 1.0, India expanded fabrication, assembly, testing and design infrastructure. As a result, the country moved from policy formulation to early production readiness. Building on this momentum, ISM 2.0 aims to consolidate gains and improve global competitiveness.
Officials said the mission aligned with the broader vision of Aatmanirbhar Bharat. Moreover, it positioned India as a reliable partner in global semiconductor supply chains.
India Semiconductor Mission 2.0 focuses on manufacturing, design and skills
The government said India’s semiconductor market was growing rapidly due to rising demand from electronics, automobiles and telecom sectors. Industry estimates placed the market at about $38 billion in 2023 and $45–50 billion in 2024–25. By 2030, it could reach $100–110 billion.
The Centre noted that ISM 1.0, approved in December 2021, carried incentives worth ₹76,000 crore. It offered fiscal support of up to 50 per cent for fabs, compound semiconductors, assembly, testing and chip design. As of December 2025, 10 projects with investments of ₹1.60 lakh crore were approved across six states.
By 2029, India is expected to meet 70–75 per cent of its domestic chip demand. Therefore, ISM 2.0 will now focus on advanced manufacturing. The roadmap targets 3-nanometre and 2-nanometre technology nodes. By 2035, India aims to rank among the world’s top semiconductor nations.
For 2026–27, the modified semiconductor and display manufacturing programme has an outlay of ₹8,000 crore. The government said it would accelerate investments, generate skilled jobs and expand fabrication and packaging capacity.
The Centre also highlighted the Design Linked Incentive scheme. As of January 2026, it supported 24 startups and enabled advanced tape-outs, including chips at 12 nm nodes. In parallel, indigenous processors such as DHRUV64 strengthened sovereign design capabilities.
Talent development remains a core focus. Programmes such as Chips to Startup, AICTE-led courses, SMART Labs and industry partnerships aim to build a large, industry-ready workforce.
Officials said India Semiconductor Mission 2.0 marked a shift from ecosystem creation to consolidation. Consequently, it strengthened technological sovereignty and reinforced India’s role in resilient global supply chains.
