India’s semiconductor ambitions have received a major boost with the Expenditure Finance Committee (EFC) under the finance ministry approving a spending proposal of about ₹1.20 lakh crore for the second phase of the India Semiconductor Mission, news agencies reported.

This proposal will now be placed before the Union Cabinet for final approval, marking a significant escalation in the country’s drive to establish a robust domestic semiconductor ecosystem.

The proposed allocation under India Semiconductor Mission 2.0 is substantially higher than the ₹76,000 crore sanctioned for the first phase. This sharp increase signals the government’s determination to deepen semiconductor manufacturing capabilities and reduce reliance on imports. Officials have indicated that ISM 2.0 will be broader in scope, offering larger incentives and covering more aspects of the semiconductor value chain.

The initiative is designed to make India self-reliant in semiconductor manufacturing. A senior official confirmed that the EFC has given its nod, and the proposal will be placed before the next Union Cabinet meeting. The Ministry of Electronics and Information Technology (MeitY), which is the nodal ministry for the mission, had initially demanded ₹1.50 lakh crore for the program, underscoring the scale of ambition behind this effort.

India Semiconductor Mission 2.0 is expected to expand beyond fabrication, assembly, testing, and packaging to include semiconductor equipment, materials, and indigenous intellectual property. This broader scope reflects the government’s recognition of the need to build a complete ecosystem rather than focusing solely on chip production.

The larger outlay will also provide stronger incentives to attract global players while supporting domestic firms and start-ups.

The timing of this expansion is crucial, as global supply chains are undergoing realignment due to geopolitical tensions and rising demand for advanced chips. India’s strategy aims to position itself as a key player in the international semiconductor supply chain, ensuring resilience and competitiveness. 

The new phase of the mission is expected to catalyse investment, generate high-skilled employment, and foster collaboration between industry, academia, and government institutions.

The approval of ISM 2.0 by the EFC represents a decisive step in India’s semiconductor journey. Once cleared by the Union Cabinet, the program will provide the financial muscle needed to accelerate projects already underway and attract new ventures.

This development is likely to strengthen India’s standing in the global technology landscape and contribute significantly to its long-term economic and strategic goals.

Agencies