Semiconductor Mission 2.0 will direct ₹1.27 lakh crore towards design, fabrication, equipment, materials, research and skills as New Delhi seeks greater technological self-reliance.
India’s Semiconductor Mission 2.0 is being positioned as a broader industrial push, not just a chip-making incentive. According to IBEF, the programme is intended to draw investment, deepen domestic capabilities and give India a larger role across the semiconductor value chain, from equipment and materials to design. Dr Abhay Karandikar of NITI Aayog said the second phase could unlock sizeable private investment and help build a more complete homegrown ecosystem.
The emphasis is moving beyond fabrication alone. The Economic Times reported that the latest phase places particular weight on design and intellectual property, with the aim of linking Indian-owned technology to domestic production. That approach matters because a semiconductor industry built only around assembly remains exposed to imported tools, imported materials and foreign intellectual property. By contrast, a fuller ecosystem can support chip design, manufacturing inputs and eventual fabrication within the country, which is closer to the government’s stated goal of technological sovereignty.
Communications Today reported that the Union Cabinet approved ISM 2.0 on 15 July with a budget of ₹1.27 lakh crore, a sharp increase from the first phase. The second stage is expected to cover six linked areas: chip design, fabrication plants, equipment, materials, assembly and testing, research and development, and talent development. That wider remit suggests the government is trying to build not just factories, but also the engineering and industrial base needed to sustain them.
The policy is also being reinforced by separate public funding for innovation. IBEF said the Union Cabinet has approved a ₹1 lakh crore Research, Development and Innovation scheme designed to draw in private-sector spending over six years, including ₹20,000 crore in FY2025-26. Alongside that are existing programmes such as the Anusandhan National Research Foundation, the National Quantum Mission, the India AI Mission and the National Green Hydrogen Mission. Together, these initiatives point to a coordinated attempt to support advanced manufacturing with public research, laboratory work and commercial technology transfer.
That broader strategy arrives as India seeks to reduce dependence on external supply chains in strategically important sectors. The government’s semiconductor ambitions are unfolding alongside industrial partnerships and international co-operation, including efforts to localise fabrication equipment and develop technical talent. In that context, ISM 2.0 is less a single policy than a signal that New Delhi wants semiconductors to become a core part of its long-term industrial and technological base.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
