India Announces Semiconductor Mission 2.0 in Budget 2026-27 to Target Equipment, Materials and Domestic IP

In the Union Budget for 2026-27, Finance Minister Nirmala Sitharaman announced the launch of India Semiconductor Mission 2.0 (ISM 2.0), building on the earlier phase of the initiative.

ISM 2.0 will concentrate on semiconductor equipment, silicon IP, chemicals, and electronics components manufacturing. The mission aims to produce equipment and materials, develop full-stack Indian intellectual property (IP), and strengthen supply chains. It will also support industry-led research and training centres to advance technology development and build a skilled workforce.

The government stated that India Semiconductor Mission 1.0 expanded the country's semiconductor sector capabilities. Under that phase, most outsourced semiconductor assembly and test (OSAT) players have already begun production. India's first wafer fabrication facility, being constructed by Tata Electronics, is expected to start volume production of wafers in 2027 or 2028.

The Electronics Components Manufacturing Scheme, launched in April 2025 with an initial outlay of ₹22,919 crore, has secured investment commitments that are already double the original targets. The government now proposes to increase the scheme's outlay to ₹40,000 crore to build on this progress.

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