India’s Chip‑Making Push Gets a Massive Funding Boost
The India Semiconductor Mission 2.0 (ISM 2.0) has been cleared by the Expenditure Finance Committee for an outlay of ₹1.25 lakh crore. This is almost double the ₹76,000 crore allocated to the first phase (ISM 1.0). The approval signals the government’s determination to make India a global hub for semiconductor production.
Key Developments
- The Expenditure Finance Committee will forward the ₹1.25 lakh crore proposal to the Cabinet for final approval.
- ISM 2.0 aims to strengthen the entire chip ecosystem: equipment, raw materials, indigenous designs and resilient supply chains.
- 12 semiconductor manufacturing projects worth about ₹1.64 lakh crore have already been approved, including one fab, two compound‑semiconductor fabs and nine packaging units.
- On the design front, the Design Linked Incentive Scheme backs 24 projects, 105 firms have received advanced design tools, and 23 tape‑outs have been completed at various foundries.
- Union Minister for Electronics and IT Ashwini Vaishnaw has said ISM 2.0 will prioritize indigenous chip design, productisation, ecosystem partners and talent development.
Important Facts
• The allocation of ₹1.25 lakh crore makes ISM 2.0 the largest single‑sector investment in India’s technology sector to date.
• Deloitte projects the Indian semiconductor market to reach $300 billion by 2035.
• Two of the approved manufacturing projects have already started commercial production, and a third – CG Semi – is slated for inauguration on 4 July 2026.
Exam Relevance
Understanding ISM 2.0 is crucial for GS III (Economy & Technology) and GS II (Polity) questions on industrial policy, self‑reliance (Atmanirbhar Bharat) and strategic sectors. The programme illustrates how the government uses budgetary allocations, inter‑ministerial coordination and incentive schemes to build a high‑technology ecosystem. It also ties into security concerns, as a domestic semiconductor supply reduces dependence on foreign sources.
Way Forward
To translate the massive outlay into tangible outcomes, the government must:
- Ensure timely land acquisition and clear regulatory approvals for the 12 approved fabs.
- Strengthen skill‑development programmes to create a pipeline of chip‑design engineers and process technicians.
- Promote public‑private partnerships for research in advanced nodes and compound semiconductors.
- Monitor progress through a dedicated oversight committee reporting to the Cabinet.
Successful implementation will not only boost India’s export earnings but also enhance national security and technological sovereignty.