India's Finance Ministry committee approved a massive ₹1.25 lakh crore outlay for its Semiconductor Mission 2.0. This new allocation is 64% larger than the initial ₹76,000 crore for ISM 1.0, signaling a serious escalation of ambition. The funding aims to fast-track chip manufacturing and design, targeting a critical global supply chain gap.
How We Got Here
The Union Budget 2026-27 first announced the second edition of the India Semiconductor Mission, focusing broadly on the chip manufacturing ecosystem. Earlier this year, two of 12 approved manufacturing projects began commercial operations under the mission.
The Numbers
- The cleared ₹1.25 lakh crore proposal from the Expenditure Finance Committee now moves to the Cabinet for final approval.
- India has already approved 12 semiconductor manufacturing projects worth ₹1.64 lakh crore, including one fabrication unit and nine packaging units.
- CG Semi is expected to inaugurate its commercial manufacturing unit on July 4.
- On the design front, 24 projects receive support under the Design Linked Incentive Scheme, leading to 23 design 'tapeouts'.
What Happens Next
🇮🇳 Why This Matters for India
For deep-tech founders and engineers in Hyderabad and Pune, this surge in funding creates new opportunities for IP development and specialized talent demand in the semiconductor sector.
The Take
This funding suggests India is betting big on becoming a global chip design hub first, given the DLI scheme's progress and the relatively lower number of full-scale fabs. The real win for India lies in attracting specialized IP development companies, not just manufacturing assembly lines.
Source:
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