The Finance Ministry's Expenditure Finance Committee (EFC) has approved an outlay of ₹1.25 lakh crore for the India Semiconductor Mission (ISM) 2.0, marking a major step in the country's efforts to strengthen domestic chip manufacturing and build a comprehensive semiconductor ecosystem, according to sources told PTI. The proposal was cleared by the EFC and will now be placed before the Union Cabinet for final approval. This represents a significant increase from the ₹76,000 crore allocated under ISM 1.0, under which the government approved 10 semiconductor facilities across chip fabrication, assembly and design. The enhanced budgetary support will offer fiscal incentives of up to 50% for silicon fabs, compound semiconductor facilities, assembly and testing units, and chip design operations.
Semiconductor-linked stocks soared on Wednesday following the EFC approval, with CG Power and Industrial Solutions climbing 2% to hit a fresh 52-week high of ₹969.90, as reported by The Hindu BusinessLine. Kaynes Technology gained nearly 3% to ₹3,208 on the NSE, while MosChip Technologies advanced more than 4% to ₹215.74. Other semiconductor and electronics manufacturing-related stocks, including Dixon Technologies, Syrma SGS Technology, Cyient DLM and Avalon Technologies, also traded in positive territory. The proposed expansion of the semiconductor incentive programme is expected to benefit companies across the semiconductor value chain, including chip manufacturing, semiconductor engineering, electronics manufacturing services and supply chain players.
The expanded scheme is expected to support the wider semiconductor ecosystem, including industrial gases, specialty chemicals, capital equipment, MSMEs and ancillary suppliers, as reported by NDTV Profit. The aim is to strengthen India's semiconductor supply chain and reduce import dependence on critical semiconductor components. The government expects the enhanced programme to help India meet up to 75% of its domestic semiconductor demand by 2030. The proposed outlay is expected to place greater emphasis on financial and non-financial incentives for compound semiconductor units, as well as manufacturers of gases, ingots and other raw materials used in chip fabrication and packaging, according to Business Standard.
The government expects the enhanced programme to help India meet up to 75% of its domestic semiconductor demand by 2030, reducing import dependence and supporting the country's ambitions of becoming a global electronics manufacturing hub, according to NDTV Profit. ISM 2.0 aims to strengthen support for chip manufacturing, design and skill development while positioning semiconductors as a strategic sector for economic resilience, digital infrastructure and technological self-reliance, as reported by Business Standard. Union Electronics and IT minister Ashwini Vaishnaw had earlier stated that the second phase of the mission would focus on indigenous chip design, productisation, attracting ecosystem partners and talent development. This strategic initiative aligns with India's broader goal of establishing itself as a key player in the global semiconductor supply chain and reducing reliance on foreign suppliers for critical technology components.
Under ISM 1.0, the government approved 10 major projects with cumulative investments of roughly ₹1.60 trillion across six Indian states as of December 31, 2025, according to Business Standard. The scheme is also expected to strengthen domestic chip design capabilities by supporting companies that retain intellectual property rights in India, helping to build India's semiconductor ecosystem from the ground up. In the Union Budget 2026-27, the government allocated ₹1,000 crore for ISM 2.0, demonstrating continued commitment to the semiconductor mission, as reported by Business Standard. The Union Budget for 2026-27 had announced India Semiconductor Mission 2.0 to deepen the country's semiconductor manufacturing capabilities by supporting equipment, materials, indigenous chip designs and other critical components of the value chain, as reported by PTI. The approval now paves the way for the next phase of India's semiconductor manufacturing push, with the enhanced programme expected to accelerate project execution, attract private investment and expand domestic capacity across the semiconductor value chain.
