Finance Minister Nirmala Sitharaman announced the launch of India Semiconductor Mission (ISM) 2.0 in the Union Budget 2026-27, marking a strategic push to elevate the country’s capabilities in semiconductor production.The initiative builds directly on ISM 1.0, shifting focus toward high-value segments including the manufacturing of semiconductor equipment and materials. It also prioritizes the development of full-stack Indian intellectual property and the fortification of domestic supply chains.

Budget 2026 strengthens the “future-ready” manufacturing stack behind next-generation vehicles. The India Semiconductor Mission will advance through ISM 2.0 to build domestic capability in equipment and materials, develop full-stack Indian IP, and create industry-led R&D and training centers. The Electronics Components Manufacturing Scheme, launched in April 2025, is proposed to be scaled up with the outlay raised from ₹22,919 crore to ₹40,000 crore, reflecting strong investment traction. To secure EV-era inputs, the Rare Earth Permanent Magnets initiative will be supported through dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to promote mining, processing, R&D and manufacturing.

India’s initiatives in the semiconductor and electronics manufacturing space — through mission-driven, industry-linked research and development — signal a shift towards the government concentrating resources in priority domains, the Economic Survey for 2025-26 has said.

India’s IT minister Ashwini Vaishnaw on Tuesday laid out an ambitious roadmap for India’s semiconductor push, saying the government plans to support at least 50 fabless chip companies in the next phase of the India Semiconductor Mission (ISM), also called ISM 2.0, by scaling up the Design Linked Incentive (DLI) Scheme, with the long-term goal of producing “one AMD” and “one Qualcomm” out of the country.