Budget 2026: ₹40,000 Crore for Semiconductor Mission 2.0

A Strategic Push for Technological Self-Reliance

In a significant move to establish India as a global electronics manufacturing hub, Finance Minister Nirmala Sitharaman, in her Union Budget 2026 speech, announced the launch of the India Semiconductor Mission 2.0 (ISM 2.0). The initiative is backed by a substantial outlay of ₹40,000 crore, signaling a clear policy shift from assembling electronics to building a deep, resilient domestic ecosystem for critical components and semiconductors.

This announcement builds on the foundation laid by the first phase of the mission and aims to reduce India's heavy reliance on imports, fortify supply chains, and create high-value jobs in the technology sector.

From Fabs to a Full Ecosystem

Unlike its predecessor which primarily focused on attracting chip fabrication plants, ISM 2.0 adopts a more comprehensive strategy. The Finance Minister stated that the new mission will prioritize the domestic production of semiconductor equipment and materials, the development of full-stack Indian intellectual property (IP), and the overall strengthening of the supply chain. This strategic pivot is designed to address critical gaps in India's manufacturing capabilities, moving the country up the global value chain.

A key component of this strategy is the emphasis on human capital. The government will promote industry-led research and training centers to cultivate a skilled workforce, ensuring that India has the necessary talent to support its growing ambitions in chip design and manufacturing.

Bolstering Electronics Component Manufacturing

Complementing the push for semiconductors, the budget also provided a major boost to the broader electronics components sector. The outlay for the Electronics Components Manufacturing Scheme (ECMS), which was launched in April 2025, has been nearly doubled to ₹40,000 crore from its initial allocation of ₹22,919 crore.

The Finance Minister noted that the scheme has already attracted investment commitments that are double its initial targets, indicating strong investor confidence. This enhanced funding will support domestic production of critical components like printed circuit boards (PCBs), capacitors, and display modules, which are essential for a wide range of electronic goods.