The outlay for the India Semiconductor Mission (ISM) 2.0 is expected to exceed ₹1 lakh crore, the amount the IT ministry has sought from the government, officials aware of the matter said. An announcement on the second phase is expected by the end of April, with the ministry’s proposal currently under inter-ministerial consultation.
The first phase of the mission had an outlay of ₹76,000 crore and attracted investments of about ₹1.6 lakh crore. The ₹1 lakh crore sought by the IT ministry would be in addition to the ₹76,000 crore allocated in the first phase.
As of December 2025, 10 projects have been approved, with four expected to begin chip production this year across six states under the first phase. These include silicon fabrication units, silicon carbide fabs, advanced and memory packaging facilities, and specialised assembly and testing infrastructure.
“Phase 2 will involve additional fresh funding, as the funds allocated under the first phase have already been committed to approved projects. The ₹76,000 crore outlay will be disbursed as these projects are implemented,” said a senior IT ministry official, requesting anonymity.
ISM 2.0 is expected to place greater emphasis on strengthening India’s semiconductor design ecosystem, developing critical equipment and materials used in chip manufacturing, and building end-to-end Indian intellectual property (IP) across the semiconductor value chain. The next phase of the programme will also focus on securing supply chains and creating a long-term roadmap for India to move towards advanced chip technologies such as 3-nanometre and 2-nanometre nodes.
{{/usCountry}}ISM 2.0 is expected to place greater emphasis on strengthening India’s semiconductor design ecosystem, developing critical equipment and materials used in chip manufacturing, and building end-to-end Indian intellectual property (IP) across the semiconductor value chain. The next phase of the programme will also focus on securing supply chains and creating a long-term roadmap for India to move towards advanced chip technologies such as 3-nanometre and 2-nanometre nodes.
{{/usCountry}}India’s semiconductor manufacturing capabilities are currently limited to 180-nanometre (nm) chips, produced at the government-run Semiconductor Laboratory in Mohali. These chips are typically used in sectors such as defence, space and industrial electronics.
However, several new projects announced under the government’s semiconductor incentive programme aim to manufacture more advanced 28-nm chips, including the fabrication plant being set up by Tata Electronics in partnership with Powerchip Semiconductor Manufacturing Corporation in Gujarat.
Globally, leading chipmakers such as Taiwan Semiconductor Manufacturing Company and Samsung Electronics are already producing chips at 3-nm nodes, highlighting the gap India is aiming to bridge through initiatives such as the ISM.
The government also aims to attract global semiconductor players under ISM 2.0 as part of its broader goal of building Indian chip design companies that can eventually rival global leaders such as Advanced Micro Devices and Qualcomm, a vision articulated recently by IT minister Ashwini Vaishnaw.
In addition, under ISM 2.0, the government plans to encourage industry-led research and training centres to help develop new technologies and build a skilled workforce for the semiconductor sector. The government intends to support at least 50 fabless semiconductor companies under ISM 2.0 by expanding the Design Linked Incentive (DLI) scheme.