India Semiconductor Mission 2.0 Draft Ready, Cabinet Approval Targeted by March 2026

The India Semiconductor Mission (ISM) is set to enter its next phase, with officials confirming that the draft of ISM 2.0 has been completed. The Ministry of Electronics and IT (MEITY) is preparing to move the proposal through inter‑ministerial consultations.

The government aims to secure Cabinet approval by the end of March 2026. ISM 2.0 is expected to deepen India’s long‑term semiconductor strategy following the earlier ₹76,000 crore Phase 1 programme.

Status Of ISM 2.0 And Approval Timeline

Government officials confirmed that the drafting of ISM 2.0 has been completed within MEITY. The proposal will now move to the Finance Ministry for expenditure authorisation.

Following this, MEITY will begin inter‑ministerial consultations to build consensus across departments. The government is targeting Cabinet approval for the new semiconductor support scheme by March 2026.

Background And Outcomes of ISM Phase 1

Phase 1 of the India Semiconductor Mission was approved in 2021 with an outlay of ₹76,000 crore. Under this first phase, 10 semiconductor projects have been cleared, covering fabs, display fabs, compound semiconductor operations and ATMP facilities.

These projects represent a cumulative investment of ₹1.6 lakh crore across 6 states. The scale of these approvals has laid the foundation for India’s emerging semiconductor ecosystem.

Expected Scale and Structure of ISM 2.0

Officials have indicated that the outlay for ISM 2.0 is likely to be higher than the ₹76,000 crore sanctioned for Phase 1. The expanded allocation will support the next stage of domestic chip design and fabrication.

The scheme structure has been fully drafted and awaits financial vetting and ministerial approvals. Once cleared, it will guide incentives for emerging semiconductor segments.

Inter‑Ministerial Consultation Process

With drafting completed, MEITY will begin consultations with other ministries to finalise the programme. The Finance Ministry’s approval will be central to confirming funding levels.

After these clearances, a Cabinet note will be presented to secure final approval. This sequence will determine the rollout timeline for the updated semiconductor mission.

Read More: India Unveils New Roadmap to Strengthen Semiconductor Ecosystem.

Conclusion

India has moved closer to launching ISM 2.0 as part of its long‑term strategy to expand domestic semiconductor capabilities. With Phase 1 enabling 10 major projects, the groundwork for scaling local chip manufacturing is already in place.

The upcoming approvals process will decide the scope and speed of Phase 2 implementation. A higher outlay for ISM 2.0 signals the government’s continued commitment to strengthening India’s semiconductor ecosystem.

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