Budget 2026: Govt to roll out Semiconductor Mission 2.0 with ₹40,000 cr

Union Budget 2026: The government will launch India Semiconductor Mission 2.0 with an outlay of ₹40,000 crore to support chip equipment manufacturing, R&D and training

The government will roll out the India Semiconductor Mission 2.0 with an outlay of ₹40,000 crore to boost semiconductor equipment manufacturing and research, Finance Minister Nirmala Sitharaman announced in her Union Budget 2026 speech on Sunday. 

"India's semiconductor mission 1.0 expanded India's semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce semiconductor equipment and materials, develop full-stack Indian IP, and strengthen supply chains," she said.

 

The finance minister said the government will push "industry-led research and training centres" to promote innovation and build a skilled workforce in the semiconductor sector. These centres will work with companies to develop new technologies and train engineers and technicians needed for the fast-growing electronics and chip-making industry.

 

Sitharaman pointed out that there is strong investor interest in the electronics components manufacturing scheme, which was launched in April 2025 with an outlay of ₹22,919 crore. The scheme has already attracted investment commitments that are double the initial targets. To build on this momentum, the government plans to increase the outlay of the scheme to ₹40,000 crore, she announced.   

 

Economic Survey highlights momentum in India’s semiconductor push

The Economic Survey 2025-26, released earlier this week, said India’s efforts in semiconductor and electronics manufacturing point to a focused and long-term strategy. It noted that mission-driven and industry-linked research and development reflects the government’s move to channel resources into priority sectors.

 

According to the Survey, these initiatives place India among a small group of middle-income economies steadily moving towards more complex and advanced production systems.

 

As of January 2026, the government has approved 10 semiconductor projects with a total investment of ₹1.60 trillion under the flagship ₹76,000 crore India Semiconductor Mission.

 

These projects are expected to play a key role in building domestic chip-making capacity and reducing India’s dependence on imports.