The Indian government has approved a major financial package worth Rs 1.9 lakh crore to accelerate the country's electronics manufacturing sector. This initiative, announced this week, includes two primary programs: the Rs 1.27 lakh crore Semicon 2.0 mission and a Rs 62,500 crore Mobile Phone Manufacturing Scheme. These efforts aim to transition India from an assembly-focused hub to a comprehensive center for semiconductor design, fabrication, and advanced component production over the next five years.
Building on the initial phase of the India Semiconductor Mission, the new policy broadens the scope of government support. While the first phase primarily targeted fabrication and packaging, Semicon 2.0 will now incentivize chip design, research and development, talent cultivation, and the production of specialized materials and equipment. This shift is intended to create a self-reliant domestic ecosystem, reducing reliance on international imports for critical technology components.
The Mobile Phone Manufacturing Scheme (MPMS) serves as a successor to previous production-linked incentive programs. It offers financial incentives ranging from 2.25% to 5% on eligible sales, specifically encouraging companies to source components locally and invest in indigenous product design. By deepening local value addition, the government hopes to strengthen India's role in the global electronics supply chain.
Officials expect these combined investments to attract approximately Rs 4 lakh crore in total capital, generate significant semiconductor production, and create thousands of direct jobs. The programs are scheduled to run from the 2026-27 fiscal year through 2030-31. As the government prepares to release detailed operational guidelines, the industry is watching closely to see how these incentives will be distributed among startups and large private conglomerates.