Can India Become A Global Chip Hub? ISM 2.0 Aims For Big Leap

The government is advancing plans to launch an expanded India Semiconductor Mission (ISM 2.0), likely by May. It proposes a financial outlay ranging between Rs 1 lakh crore and Rs 1.2 lakh crore.

Authorities are conducting inter-ministerial consultations, while the Ministry of Electronics and Information Technology awaits final clearance from the Finance Ministry.

The revised outlay significantly exceeds the Rs 76,000 crore allocated to the initial phase. It reflects a stronger policy focus on semiconductor development.

Under ISM 2.0, policymakers intend to broaden the programme’s scope beyond chip fabrication and design.

The framework will extend support to semiconductor equipment manufacturing, raw materials, and other critical inputs. It will also prioritise the development of full-stack intellectual property and reinforce supply chain resilience.

This strategic expansion responds to global supply disruptions and heightened geopolitical uncertainty affecting chip availability.

The revamped mission will integrate ancillary industries, including gas suppliers, speciality chemical producers, MSMEs, and other ecosystem participants.

A redesigned Design-Linked Incentive scheme, DLI 2.0, will enable foreign companies to collaborate with Indian firms in domestic research and development.

The initiative aims to accelerate innovation and foster the emergence of nearly 50 fabless semiconductor design enterprises.

During the first phase, authorities approved 10 semiconductor projects worth approximately Rs 1.6 lakh crore across six states, covering fabrication, assembly, testing, and packaging.

Officials project domestic semiconductor demand to reach $110 billion by 2030, with India aiming to meet nearly 75 per cent of this demand locally.

The roadmap includes advanced manufacturing nodes such as 3-nanometre and 2-nanometre technologies, targeting global leadership by 2035.

The initiative aligns with broader efforts by major economies to localise semiconductor production.

Finance Minister Nirmala Sitharaman announced ISM 2.0 in the Union Budget 2026-27.

The move reinforces the government’s long-term strategy to reduce import dependence and strengthen India’s position in the global semiconductor value chain.

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