India Semiconductor Mission 2.0 Launched

The Union Budget 2026–27 marked a major inflection point in India’s technology strategy with the announcement of India Semiconductor Mission (ISM) 2.0. At a time when semiconductors underpin critical digital, industrial and strategic systems, the new phase signals a decisive policy push to deepen domestic capabilities and strengthen India’s position in global chip supply chains.

Strategic Focus of ISM 2.0

ISM 2.0 expands the scope of the earlier mission by focusing on semiconductor equipment and materials manufacturing, development of full-stack Indian semiconductor intellectual property, and supply chain resilience. A provision of ₹1,000 crore has been earmarked for FY 2026–27, with emphasis on industry-led research, training centres and skill development. The initiative builds on the foundation laid under ISM 1.0, aligning with the broader vision of Atmanirbhar Bharat and production readiness.

Progress Under India Semiconductor Mission 1.0

Approved by the Union Cabinet in December 2021, ISM 1.0 was supported by an incentive outlay of ₹76,000 crore. As of December 2025, 10 projects with a cumulative investment of ₹1.60 lakh crore have been approved across six states. These include silicon fabs, compound semiconductor units, advanced packaging facilities and assembly and testing infrastructure. Together, they are shaping a resilient domestic semiconductor ecosystem and enabling India to meet up to 70–75 per cent of domestic chip demand by 2029.

Market Outlook and Global Positioning

India’s semiconductor market has grown rapidly, from about $38 billion in 2023 to an estimated $45–50 billion in 2024–25, and is projected to reach $100–110 billion by 2030. Platforms such as SEMICON India and expanding manufacturing capacity reflect growing global confidence. Under ISM 2.0, India has set a roadmap to achieve advanced 3 nm and 2 nm technology nodes, with the long-term goal of becoming one of the world’s top semiconductor nations by 2035.

What to Note for UPSC Prelims?

• India Semiconductor Mission was launched in December 2021.
• ISM 2.0 has an allocation of ₹1,000 crore for FY 2026–27.
• Semiconductors are critical for defence, telecom, AI and automobiles.
• Taiwan produces over 60% of global semiconductors.

Design, Talent and Indigenous Technology Push

A key pillar of the mission is strengthening semiconductor design and human capital. The Design Linked Incentive scheme now supports multiple startups, academic tape-outs and patent filings. Indigenous processors such as DHRUV64 and SHAKTI, developed under national programmes, highlight India’s push for technological sovereignty. Complemented by skilling initiatives through AICTE, NIELIT and industry partnerships, ISM 2.0 aims to create a future-ready workforce capable of sustaining India’s semiconductor ambitions.