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Source — Source: PIB ///Category — GS Paper 2 ///Published — 2026-02-10 ///Exam — Both Prelims and Mains ///Tags — Quick Facts For Prelims, GS Paper - 2, Government Policies & Interventions ///Source — Source: PIB ///Category — GS Paper 2 ///Published — 2026-02-10 ///Exam — Both Prelims and Mains ///Tags — Quick Facts For Prelims, GS Paper - 2, Government Policies & Interventions ///

Source: PIB · GS Paper 2

India Semiconductor Mission 2.0

The Union Budget 2026‑27 announced India Semiconductor Mission (ISM) 2.0 with a ₹1,000 crore allocation, shifting focus from ecosystem creation to consolidation, advanced manufacturing and global integration. The mission aims for 70‑75% self‑sufficiency in chip demand by 2029 and to achieve 3 nm/2 nm node capabilities by 2035, making it a key policy for technology, security and economic growth.

2026-02-10

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Source: PIB

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Key Facts and Data Points

Budget allocation for ISM 2.0 (FY 2026‑27): ₹1,000 crore.
ISM 1.0 incentive outlay: ₹76,000 crore with up to 50% fiscal support.
Projects approved (till Dec 2025): 10 projects across six states, total investment ₹1.60 lakh crore covering silicon fabs, compound semiconductors, advanced packaging and testing.
Market size: $38 bn (2023) → $45‑50 bn (2024‑25) → projected $100‑110 bn by 2030.
Self‑sufficiency target: 70‑75% of domestic chip demand by 2029.
Advanced node goal: 3 nm and 2 nm manufacturing capability by 2035.
Complementary programme: Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem – ₹8,000 crore for 2026‑27.

Background and Context

ISM 1.0 launched in Dec 2021 to create a foundational semiconductor ecosystem.
Global chip shortages and geopolitical uncertainties highlighted the strategic need for domestic capacity.
Aligns with broader initiatives: Make in India, Aatmanirbhar Bharat, and Digital India.

Significance for India / Governance / Policy

Supply‑chain security: Reduces dependence on imports for defence, telecom, AI and critical infrastructure.
Economic impact: Generates high‑skill employment, attracts foreign investment, and creates export potential.
Strategic autonomy: Positions India as a reliable player in the global semiconductor value chain.

Related Constitutional / Legal Provisions

Make in India (2014): Policy framework encouraging domestic manufacturing.
Aatmanirbhar Bharat Abhiyan (2020): Self‑reliance drive across sectors.
National Policy on Electronics (2020): Promotes indigenous electronics and semiconductor manufacturing.
Fiscal incentives under Section 80‑IA of the Income Tax Act: Tax benefits for R&D and manufacturing units.

Key Initiatives under ISM 2.0

Semiconductor Design Linked Incentive Scheme: Supports fabless companies, IP development and design manpower.
Digital India RISC‑V Programme: Promotes open‑source processor development without licence costs.
Chips to Startup Programme: Provides startups and universities access to advanced design tools and fabrication.
Indigenous Microprocessor Development: Projects like DHRUV64 to reduce reliance on imported processors.