 "Union Finance Minister Nirmala Sitharaman shows the digital tablet containing the Budget document. (PTI)")
Speaking at the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced that the Indian Semiconductor Mission will continue into the new fiscal year with a fresh allocation of Rs 40,000 crore under Semiconductor Mission 2.0.
Further continuing her speech, the FM added, “Building on this, we will launch ISM 2.0 to produce equipment and materials, design full stack, Indian IP and fortify supply chains. We will also focus on industry led research and training centers to develop technology and skilled workforce.”
The initiative, launched in 2021 under the Ministry of Electronics and Information Technology (MeitY), aims to establish a comprehensive, end-to-end semiconductor ecosystem within India, spanning chip design, fabrication, and testing.
In September last year, the government rolled out the SEMICON India Programme, with a massive investment of Rs 76,000 crore to strengthen the country’s position in global chip manufacturing. The new funding reaffirms the Centre’s continued commitment to making India a self-reliant hub for semiconductor production.
The announcement comes amid rising global semiconductor costs and increasing competition for supply chain control. Having domestic fabrication capabilities gives India a strategic advantage, reducing its dependence on imports while boosting local manufacturing and innovation.
Aditya Khemka, Managing Director, Aditya Infotech Ltd (CP PLUS), “The increased outlay of Rs 40,000 crore for the India Semiconductor Mission 2.0 strengthens the foundation of India’s electronics manufacturing landscape.”
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View AllKhamka said, “For the security and surveillance sector, domestic semiconductor capabilities are essential for building reliable and scalable hardware systems.”
“The emphasis on research, training, and skill development will enhance supply-chain resilience for critical security infrastructure. We look forward to supporting these initiatives as they take shape in the coming days,” added Khamka.
India’s renewed investment in chip manufacturing signals a long-term vision to become a critical player in the global semiconductor supply chain, one currently dominated by nations like Taiwan, South Korea, and the US.
Experts believe that continued funding through Semiconductor Mission 2.0 could attract major technology firms to set up fabrication units in India, accelerate research and design capabilities, and create high-skilled jobs in electronics and AI-driven industries.
Commenting on the announcement, Rajeev Singh, Managing Director, BenQ India & South Asia, said, “The enhanced allocation of Rs 40,000 crore under the India Semiconductor Mission 2.0 is a strong step towards building a resilient domestic electronics ecosystem.” He added, “A robust semiconductor supply chain is critical for advanced display, computing, and digital infrastructure technologies.”
“The focus on industry-led research and capacity building will support long-term innovation and skilled talent development. It will be important to see how these initiatives progress in the coming days, and we remain committed to supporting the ecosystem as it evolves,” he said.
If executed effectively, the mission could turn India from a consumer of chips into a key global supplier, a shift with far-reaching implications for technology, national security, and economic resilience.