The Indian Union Cabinet has approved the second phase of the India Semiconductor Mission, known as Semicon 2.0, with a budget outlay of ₹1.27 lakh crore. This significant financial commitment aims to transition India from merely hosting individual chip plants to developing a comprehensive, self-reliant semiconductor supply chain. By expanding the scope of support, the government intends to attract further private investment, with officials projecting that the new scheme could catalyze approximately ₹4 lakh crore in total industry investment and generate significant domestic production value.
Building on the foundation of the first phase, which was launched in 2021 with ₹76,000 crore, the new policy broadens its focus beyond just fabrication facilities. Semicon 2.0 targets six key pillars: chip design, manufacturing equipment, raw materials like specialty chemicals and gases, new fabrication plants, advanced assembly and packaging, and workforce development. This holistic approach is designed to ensure that India can sustain its own chip manufacturing ecosystem rather than relying heavily on imported components and expertise.
Government officials emphasized that the program is a long-term strategic move to secure India's position in the global technology landscape. With the first commercial silicon fabrication plant expected to be commissioned in 2028, the government is working to create a stable environment for global and domestic companies to set up operations. The policy includes tiered incentives, such as 40 percent support for silicon fabs and 35 percent for other types of semiconductor facilities and advanced packaging, reflecting a shift toward incentivizing the entire upstream ecosystem.
For the public and the broader economy, this initiative represents a push toward technological sovereignty. By fostering local intellectual property and design capabilities, the government hopes to reduce dependence on foreign supply chains for critical components used in everything from smartphones to defense systems. As the program moves into its implementation phase, the focus will shift to operationalizing these incentives and ensuring that the necessary infrastructure and talent are in place to meet the ambitious production targets set for the coming years.