Union govt widens scope of India Semicon Mission 2.0, doubles ECMS outlay to `40,000 cr

The government has announced the next edition of India Semiconductor Mission with a broad objective to promote chip manufacturing ecosystem in the country covering equipment, materials, indigenous designs and other components that are required to produce the high-tech components.

Finance Minister Nirmala Sitharaman on Sunday, without announcing the outlay for the scheme, proposed that the India Semiconductor Mission 2.0 will also focus on industry-led research and training centres to develop technology and skilled workforce.

"India Semiconductor Mission (ISM) 1.0 expanded India's semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design fullstack Indian IP, and fortify supply chains," she said.

Buoyed by the response to electronics component manufacturing scheme (ECMS), Sitharaman almost doubled the outlay for it. "The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,919 crore, already has investment commitments at double the target. We propose to increase the outlay to Rs 40,000 crore to capitalise on the momentum," Sitharaman said.

The Ministry of Electronics and IT has a total of 46 applications till January, entailing a total investment proposal of Rs 54,567 crore and promising to generate direct employment for about 51,000 people.

The scheme has seen participation from Samsung, Tata Electronics, Dixon, Foxconn's Yuzhan Technology, ATLbattery, Motherson Electronic, Kaynes, Amber Electronics, etc.

Semiconductor industry body IESA President Ashok Chadak said the announcement of ISM 2.0 as a Semiconductor Policy focus, the significant enhancement of the Electronic Component Manufacturing Scheme to Rs 40,000 crore, focused support for MSMEs, capital goods, ease of doing business, and reforms-led manufacturing growth provide strong continuity and confidence to industry.

"The expanded focus beyond fabs -- covering semiconductor equipment, materials, chemicals, design tools, R&D and training, and supply-chain resilience -- will help reduce import dependence and strengthen domestic capabilities and build an end-to-end ecosystem for a sustainable future," Chandak said.

Broadband gear maker GX Group CEO Paritosh Prajapati said the increase in ECMS outlay signals that ECMS has moved from policy intent to real execution on the ground.

"The focus is no longer limited to assembling finished products but is shifting toward building a strong component ecosystem, which is critical in today's fragmented global supply chains. Under the expanded outlay, the focus will be on high-value and critical components such as PCBs, power electronics, RF and optical subsystems, semiconductor-adjacent packaging and testing, passive components, precision parts, and strategic materials linked to rare earths," Prajapati said.

He said the Budget proposal transitions India from assembled in India to engineered and manufactured in India for the world.