Government Approves India Semiconductor Mission 2.0 with ₹1.25 Trillion Outlay

The Union Finance Ministry has approved a proposed ₹1.25 trillion outlay for India Semiconductor Mission (ISM) 2.0, marking a major expansion of the government's semiconductor incentive programme, as per NDTV Profit report. 

The proposal, cleared by the Expenditure Finance Committee (EFC) last week, will now be placed before the Union Cabinet for approval. 

Enhanced Support for Semiconductor Manufacturing 

The proposed outlay is significantly higher than the ₹76,000 crore allocated under ISM 1.0. 

Under the new programme, the government plans to provide fiscal support of up to 50% for silicon fabrication units, compound semiconductor facilities, assembly and testing units, and chip design. 

Focus Areas Under ISM 2.0 

The mission aims to strengthen semiconductor manufacturing, chip design, and skill development, while positioning the sector as a key driver of economic resilience, digital infrastructure, and technological self-reliance. 

The enhanced support is expected to accelerate project execution, attract greater private investment, and expand domestic capacity across the semiconductor value chain. 

The proposed scheme also places greater emphasis on financial and non-financial incentives for compound semiconductor units and manufacturers of gases, ingots and other raw materials used in chip fabrication and packaging. 

In addition, ISM 2.0 is expected to strengthen India's chip design ecosystem by supporting companies that retain intellectual property (IP) rights in the country. 

Progress Under ISM 1.0 

As of 31 December 2025, the government had approved 10 major semiconductor projects with cumulative investments of around ₹1.60 trillion across six Indian states. 

In the Union Budget 2026-27, the government had also allocated ₹1,000 crore for ISM 2.0. 

Read More: India, Saudi Arabia Sign Water Resources Cooperation MoU During Saudi Water Week! 

Conclusion 

The proposed ISM 2.0 outlay represents the next phase of India's semiconductor programme, with a broader incentive framework aimed at strengthening manufacturing, design capabilities and the domestic semiconductor supply chain.   

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