The Union Cabinet has approved Semicon Mission 2.0, allocating Rs 1.28 lakh crore to strengthen India’s semiconductor ecosystem and accelerate domestic chip production. The decision marks one of the country’s biggest investments in advanced technology manufacturing and comes alongside a separate Rs 62,500 crore incentive programme aimed at expanding mobile phone manufacturing over the next five years. Together, the two initiatives are expected to reinforce India’s ambition of becoming a global electronics manufacturing hub while reducing dependence on imported semiconductor components.
Semicon Mission 2.0 to expand India’s chip ecosystem
The fresh allocation under Semicon Mission 2.0 will be used to support semiconductor intellectual property development, chip design, fabrication facilities and research and development. According to the government, the programme is designed to strengthen every stage of the semiconductor value chain rather than focusing only on manufacturing.
India launched its first semiconductor incentive programme in 2021 with an outlay of $10 billion. Since then, the government has approved 12 semiconductor manufacturing units and 24 chip design projects. With Semicon Mission 2.0, the Centre aims to build on that progress by attracting greater investments, encouraging innovation and developing indigenous technology capabilities.
The move comes at a time when countries across the world are investing heavily in semiconductor manufacturing amid rising demand for chips used in smartphones, electric vehicles, artificial intelligence and data centres.
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Mobile manufacturing gets Rs 62,500 crore push
Alongside Semicon Mission 2.0, the Cabinet also approved a new production-linked incentive scheme worth Rs 62,500 crore for mobile phone manufacturing.
The programme offers incentives ranging from 2.25 per cent to 5 per cent on eligible sales of mobile phones manufactured in India. Companies that source critical components locally will receive an additional incentive of up to 1.5 per cent, encouraging deeper localisation of supply chains.
The government expects the scheme to create nearly 60,000 direct jobs over the next five years while increasing domestic value addition in electronics manufacturing.
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Government bets big on electronics manufacturing
With Semicon Mission 2.0, India is looking to position itself as a competitive destination for global semiconductor investments. The government believes that expanding fabrication capacity, promoting research and supporting chip design will help build a resilient domestic semiconductor ecosystem.
Information and Broadcasting Minister Ashwini Vaishnaw said the approvals reflect the government’s commitment to strengthening India’s electronics manufacturing sector and enhancing technological self-reliance.
Industry experts believe Semicon Mission 2.0 could significantly improve India’s standing in the global semiconductor supply chain if the proposed investments translate into faster project execution and sustained innovation.
