Union Budget 2026: Nirmala Sitharaman announces India Semiconductor Mission 2.0
Finance Minister Nirmala Sitharaman on Tuesday announced the second edition of the India Semiconductor Mission (ISM 2.0) in her Budget speech, aimed at strengthening India’s semiconductor ecosystem.
The minister said the new phase of the mission will focus on producing equipment and materials, designing full-stack Indian intellectual property (IP), and fortifying semiconductor supply chains. She also emphasised the government’s push to develop technology capabilities and a skilled workforce.
"ISM 1.0 expanded India’s semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains. We will also focus on industry-led research and training centres to develop technology and skill workforce," she said.
India began its semiconductor journey in 2021 with an approved incentive package of Rs 76,000 crore under the India Semiconductor Mission. Since then, ten major projects have been approved across six states, covering wafer fabrication, ATMP/OSAT, and compound semiconductor manufacturing.
In January 2026, the Electronics and Information Technology Minister Ashwini Vaishnaw said on Friday that four semiconductor units in the country—including those being set up by the Tata Group, Micron, and CG Semi—will move beyond pilot runs and trial production to begin regular, large-scale manufacturing from 2026. “Kaynes Semicon, CG Power, Micron Technology and Tata Electronics are set to start commercial manufacturing of semiconductors in India in 2026,” said the minister.
Additionally, the government has approved 24 projects for financial support and extended design infrastructure support to 100 companies, enabling chip design by domestic start-ups and MSMEs.