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Sitharaman announces India Semiconductor Mission 2.0 under Union Budget: Details
Under the Union Budget, Nirmala Sitharaman announced that Indian Semiconductor Mission 2.0 will produce equipment and materials and improve supply chains.
Finance minister Nirmala Sitharaman on Sunday announced the beginning of Indian Semiconductor Mission (ISM) 2.0 to expand the country's capabilities in this tech. She also announced an outlay of ₹40,000 crore to the Electronic Component Manufacturing Scheme (ECMS) to “capitalise on the momentum".
Hailing the success of India Semiconductor Mission 1.0, she said that India will build on its semiconductor capabilities and launch 2.0.
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What will be India Semiconductor Mission 2.0
Sitharaman said that this mission will produce equipment, materials, design full-stack Indian IP and fortify supply chains. She also informed that India will focus on industry-led research and training centres to develop technology and a skilled workforce.
The India Semiconductor Mission aims to build a strong semiconductor and display ecosystem. It focuses on building India as a global hub for electronic manufacturing and design.
What India has said about the ISM 2.0
Recently, IT minister Ashwini Vaishnaw said the government plans to support at least 50 fabless chip companies under ISM 2.0 by scaling up the Design Linked Incentive (DLI) Scheme, HT reported earlier.
India plans to soon manufacture 180-nanometre chips and by 2032, plans to manufacture 3-nanometre chips, Vaishnaw had said.
Also read: Budget 2026: India hikes defence budget by 15% to ₹7.85 lakh crore
Last year, PM Narendra Modi set the stage for IMS 2.0, saying that the new phase of the mission will usher in “next-generation” reforms with policies that reflect long-term commitments.
It won’t be long before chips are designed in India, made in India, and trusted by the world," PM said at the Semicon India 2025.
Under the first phase of the Semiconductor Mission, 10 semiconductor units were announced and approved. Announced at the end of 2021, it has an outlay of ₹76,000 crore.
Increased outlay to Electronic Manufacturing Scheme
The Finance Minister also said that the Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of ₹22,919 crore, already has investment commitments at double the target. Based on this, the minister proposed to increase the outlay to ₹40,000.
Further, Sitharaman also announced establishing rare earth corridors to promote mining, processing, research and manufacturing. This, she said, will allow India to be able to meet its own requirements with its materials.
