India to launch expanded Semiconductor Mission 2.0 with Rs 1.2 lakh crore push: Report

India Semiconductor Mission is set for expansion as ISM 2.0 with an outlay of up to ₹1.2 lakh crore, aiming to boost chip design, fabrication, and supply chains, reducing import dependence and strengthening India’s semiconductor ecosystem

New Delhi: The government is preparing to roll out an expanded version of the India Semiconductor Mission ‘ISM 2.0’ likely by May, with a proposed outlay ranging between Rs 1 lakh crore and Rs 1.2 lakh crore.

According to the NDTV Profit report, inter-ministerial consultations are currently underway, while the Ministry of Electronics and Information Technology (MeitY) is awaiting final approval from the Finance Ministry.

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The proposed allocation is significantly higher than the Rs 76,000 crore earmarked for the first phase of the semiconductor mission, said the report, citing sources.

Under ISM 2.0, the government aims to widen the scope of the programme beyond chip fabrication and design to include support for semiconductor equipment, raw materials and other critical inputs, while also focusing on building full-stack intellectual property and strengthening supply chain resilience, it said.

The move comes amid disruptions in global supply chains and increasing geopolitical uncertainties. Ancillary players such as gas suppliers, specialty chemical manufacturers, MSMEs and other ecosystem participants are expected to play a key role in the revamped framework.

A major feature of the second phase is a revamped design-linked incentive (DLI 2.0) scheme, which is likely to allow foreign firms to partner with Indian companies for semiconductor research and development within the country.

The initiative is expected to accelerate innovation and support the emergence of up to 50 fabless semiconductor design firms in the coming years.

Under the first phase of the mission, 10 semiconductor projects worth about Rs 1.6 lakh crore have been approved across six states, spanning fabrication, assembly, testing and packaging facilities, contributing to the development of a domestic semiconductor ecosystem.

In March 2025 at India’s first ‘Nano Electronics Roadshow’, S. Krishnan, Secretary, MeitY, had said that the domestic semiconductor demand market is expected to grow up to $110 billion by 2030.

Officials said ISM 2.0 is aligned with the government’s long-term objective of reducing dependence on imported chips and strengthening India’s position in the global semiconductor value chain. Under the mission, India is projected to develop capabilities to meet nearly 75 per cent of its domestic semiconductor demand by 2030.

The roadmap also targets advanced manufacturing nodes such as 3-nanometre and 2-nanometre technologies, with an ambition to position India among the top semiconductor nations globally by 2035. The push comes as major economies, including the US, European Union, Japan and South Korea, ramp up efforts to localise semiconductor production and diversify supply chains beyond a few concentrated hubs.

Finance Minister Nirmala Sitharaman has announced ‘ISM 2.0’ in the Union Budget 2026–27, which earmarked an initial allocation of Rs 1,000 crore. She had said that the scheme already has investment commitments at double the target. “It has now been proposed to increase the outlay to Rs. 40,000 crore to capitalise on the momentum,” FM Sitharaman said in the Budget speech.