India Semiconductor Mission 2.0 Launched

Union Finance Minister Nirmala Sitharaman has unveiled India Semiconductor Mission (ISM) 2.0 in the Union Budget 2026, signalling a decisive shift in India’s electronics and semiconductor strategy. The new phase aims to move the country beyond assembly-led manufacturing towards high-value semiconductor intellectual property, materials, and equipment, while deepening domestic supply chains and skills.

Key Announcements Under ISM 2.0

The Finance Minister announced the launch of ISM 2.0 to build on the gains of the first phase. The mission will focus on producing semiconductor equipment and materials, developing full-stack Indian intellectual property, and strengthening resilient supply chains. Alongside this, customs duty on video game manufacturing parts will be removed from April 1, and customs duty on TV equipment, cameras, and other instruments imported by foreign film and television crews for shooting in India will also be waived from the same date. These measures are expected to support both electronics manufacturing and India’s creative economy.

Vision Beyond Assembly Manufacturing

Speaking in Parliament, Sitharaman said ISM 2.0 will emphasise industry-led research, training centres, and workforce development. The objective is to create capabilities across the semiconductor value chain, including design, materials, fabrication equipment, and research and development. This approach is intended to reduce strategic import dependence and position India as a credible global player in advanced electronics and chip-related technologies.

Industry Response to Semiconductor Push

Technology and electronics companies have broadly welcomed the announcements. Industry leaders noted that the focus on semiconductor-linked supply chains, component localisation, and design-led incentives will help Indian manufacturers move up the value chain. Executives from smartphone, consumer electronics, and industrial technology firms highlighted that ISM 2.0 could enable long-term innovation, create skilled employment, and support affordable technology designed and developed in India.

Important Facts for Exams

• India Semiconductor Mission 2.0 focuses on materials, equipment, IP, and R&D.
• Customs duty on video game manufacturing parts to be removed from April 1.
• Duty exemption announced for film and TV shooting equipment imported by foreign crews.
• Semiconductors are classified as a strategic sector for economic and national security.

Electronics Manufacturing and Infrastructure Linkages

The Budget also reinforced infrastructure-led growth, with higher capital expenditure supporting electronics clusters and manufacturing corridors. Companies across consumer electronics, display technology, and semiconductor equipment manufacturing noted that increased public investment, combined with schemes such as expanded electronics component manufacturing support, will strengthen India’s manufacturing ecosystem. Together, ISM 2.0 and allied measures are expected to accelerate localisation, improve cost efficiencies, and support India’s ambition to emerge as a global high-tech manufacturing hub.