India’s Union Budget 2026-27 marks a significant milestone for the country’s technology sector with the announcement of India Semiconductor Mission 2.0 (ISM 2.0). This ambitious initiative represents the government’s continued commitment to establishing India as a global semiconductor hub, building on the foundation laid by ISM 1.0.
Finance Minister Nirmala Sitharaman unveiled the program during her budget presentation, emphasizing its focus on advancing India’s capabilities in producing ultra-modern semiconductor nodes of 3 nanometers and 2 nanometers. This puts India on track to compete with global leaders in cutting-edge chip manufacturing technology.
Building on Strong Foundations
ISM 1.0 successfully expanded India’s semiconductor sector capabilities, creating a completely new foundational semiconductor industry in the country. The second phase takes a more comprehensive approach, targeting the entire semiconductor ecosystem rather than just manufacturing.
According to Union Minister Ashwini Vaishnaw, ISM 2.0 will concentrate on four key areas: designing and manufacturing semiconductor equipment within India, producing materials essential for semiconductor production, creating a robust design ecosystem, and strengthening talent development initiatives.
Supporting Fabless Innovation
One of the most exciting aspects of ISM 2.0 is its focus on nurturing fabless chip companies. The government plans to support at least 50 fabless semiconductor firms by scaling up the Design Linked Incentive Scheme. This initiative aims high – creating India’s own AMD or Qualcomm from the ground up.
Industry leaders have welcomed this strategic direction noting that the enhanced capital outlay of Rs. 12.2 lakh crore combined with ISM 2.0 reaffirms the government’s commitment to deep-tech indigenization.
