Finance Minister Nirmala Sitharaman on Sunday announced the Indian Semiconductor Mission (ISM) 2.0 to expand the country's semiconductor capabilities. She said that under the mission, India would produce equipment and material and fortify supply chains.
Besides, the finance minister also announced plans to give a boost to the government's rare earths scheme. The government would support mineral-rich states like Andhra Pradesh, Kerala, Tamil Nadu and Odisha to develop dedicated rare earth corridors.
Follow live updates on Budget 2026 here.
The move aims to promote mining, research, processing and manufacturing, she said. To expand India's rare earths capacity, she also proposed to establish high-tech tool rooms by central public sector enterprises at two locations.
Over the past few years, the government has intensified focus on the semiconductor industry to use domestic chip production to ensure both economic growth and national security.
The government's announcement of expanding its semiconductor mission is being largely seen as an attempt to give China's competitive semiconductor industry a tough fight and break its monopoly.
Besides, the government's rare earths push is expected to affect mining and magnet stocks, ultimately impacting investors. Sanjiv Ganeriwala, Chairman of the Mining Council Eastern India Assocham welcomed the move.
{{/usCountry}}Besides, the government's rare earths push is expected to affect mining and magnet stocks, ultimately impacting investors. Sanjiv Ganeriwala, Chairman of the Mining Council Eastern India Assocham welcomed the move.
{{/usCountry}}“This will lead to enhanced focus and development of new technologies for manufacturing of Rare Earth Magnets to be used in phones, defence & space equivalents, EVs and other modern equipments,” Ganeriwala was quoted as saying by news agency Reuters.
She said that the digitally enabled automation service bureaus would locally design, test and manufacture high precision components at scale and at lower cost.
The government plans to enhance focus on industry-led training centres to develop a skilled workforce. Sitharaman also said that the outlay to the electronics component manufacturing scheme 2025 would be hiked to ₹40,000 crore.
This was the ninth consecutive time that Nirmala Sitharaman presented the union budget in the Parliament. The budget came days after she tabled the Economic Survey of India in Parliament for the financial year 2025-26.