The Indian Cabinet has approved the ‘India Semiconductor Mission’ (ISM 2.0) with a budget of ₹1.27 lakh crore to make the country’s semiconductor sector self-reliant. This initiative aims to promote domestic production of machinery, specialty chemicals, and raw materials necessary for chip manufacturing, thereby reducing imports. According to Information Technology Minister Ashwini Vaishnaw, the program will focus on six key pillars, with the goal of expanding the chip market to $100 billion by 2030.
The Indian Cabinet sanctioned the second phase of the ‘India Semiconductor Mission’ (ISM 2.0) during its meeting on July 15, allocating approximately ₹1.27 lakh crore for the plan. This budget significantly exceeds the ₹76,000 crore approved for the first phase in December 2021. Unlike the first phase, which focused on attracting large chip manufacturing companies, the second phase aims to develop a complete chip production ecosystem within India.
Under this mission, the government will encourage indigenous manufacturing of chip-making machines and equipment, specialty chemicals, essential raw materials, and advanced packaging technologies, which will reduce reliance on imports. Earlier, on March 31, during the inauguration of the Cansem Semiconductor plant in Sanand, Gujarat, Prime Minister Narendra Modi emphasized the need to strengthen domestic infrastructure to integrate India into the global supply chain.
Prime Minister Modi stated that India’s current chip market is valued at around $45-50 billion, and it is expected to exceed $100 billion by the end of the decade. Consequently, a major portion of this demand is targeted to be fulfilled through domestic production. The concept of ‘Semicon 2.0’ was introduced by Finance Minister Nirmala Sitharaman in the February budget, initially allocating about ₹40,000 crore to this initiative.
Information Technology Minister Ashwini Vaishnaw explained that ‘Semicon 2.0’ is built on six pillars: first, supporting new chip design companies and startups to access markets; second, promoting domestic production of machinery, chemicals, and gases essential for chip manufacturing; third, attracting new silicon, compound semiconductor, and display fabs to India; fourth, expanding chip testing and packaging facilities; fifth, developing advanced technology nodes, including cutting-edge 2-nanometer chips; and sixth, building a skilled workforce for this sector.
The policy has attracted interest from companies in developed countries including the United States, Europe, Japan, and Singapore. Ashok Chandak, President of the India Electronics and Semiconductor Association, noted that positive government and business-level partnerships are progressing with several countries in this regard.
