Centre approves Semicon 2.0 with Rs 1.27 lakh crore outlay to put India on global chip map

The Union Cabinet has approved Semicon 2.0 with a Rs 1.27 lakh crore outlay for chip design and manufacturing. The move seeks to expand India's role in the global semiconductor supply chain and reduce import dependence.

In Short

• Union Cabinet approves Semicon 2.0 with Rs 1.27 lakh crore budget
• Aim to boost semiconductor design and manufacturing ecosystem
• Rs 62,500 crore Mobile Phone Manufacturing Scheme also approved

The Union Cabinet on Wednesday approved Semicon 2.0, a new semiconductor mission with a budget outlay of Rs 1.27 lakh crore, marking India's biggest push yet to strengthen its semiconductor design and manufacturing ecosystem.

The decision builds on the progress made under the first India Semiconductor Mission and aims to make the country a bigger player in the global semiconductor supply chain at a time when demand for chips is rising rapidly because of artificial intelligence (AI), electric vehicles, consumer electronics and data centres.

The Cabinet also approved a Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) as part of a wider package of seven decisions worth around Rs 2.19 lakh crore aimed at boosting manufacturing, infrastructure and industrial competitiveness.

WHAT IS SEMICON 2.0?

Semicon 2.0 is the government's next phase of support for India's semiconductor industry.

According to the government, the programme aims to strengthen both semiconductor design and chip manufacturing while helping position India as a key global hub for electronics production.

Sharing the Cabinet decision, the government said Semicon 2.0 has been approved with a budgetary outlay of Rs 1,27,500 crore and will further the country's commitment to putting India on the global semiconductor map.

The programme builds on the momentum created by Semicon 1.0, under which several semiconductor and chip packaging projects have already been announced.

WHY ARE SEMICONDUCTORS IMPORTANT?

Semiconductors, commonly known as chips, are the brains behind almost every modern electronic device.

They power smartphones, laptops, televisions, cars, medical equipment, telecom networks, defence systems, AI servers and data centres.

As countries increasingly compete to secure chip supplies, governments around the world are investing billions of dollars to develop domestic semiconductor manufacturing capabilities.

India currently imports a large share of its semiconductor requirements, making local manufacturing an important strategic priority.

WHAT DOES THE NEW SCHEME AIM TO DO?

The government expects Semicon 2.0 to accelerate investments across the semiconductor value chain.

The focus will be on expanding India's capabilities in:

• Semiconductor design
• Chip fabrication
• Chip packaging and testing
• Electronics manufacturing
• Research and innovation
• Building a stronger domestic semiconductor ecosystem

The broader objective is to reduce India's dependence on imported chips while attracting global companies to manufacture semiconductors in the country.

PART OF A LARGER MANUFACTURING PUSH

Electronics and Information Technology Minister Ashwini Vaishnaw said the semiconductor package was among seven major decisions approved by the Cabinet and the Cabinet Committee on Economic Affairs (CCEA).

Besides Semicon 2.0, the Cabinet also cleared:

• A Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS)
• Infrastructure projects in Varanasi
• National Investment Policy for Urea 2026
• Doubling of the Paradeep-Haridaspur rail line
• A fourth railway line between Dangoaposi and Rajkharsawan

Together, these measures involve investments of around Rs 2.19 lakh crore and are aimed at strengthening India's manufacturing and industrial ecosystem.

The approval comes as India looks to become a bigger player in the global semiconductor industry, which has become increasingly important amid rising geopolitical tensions and supply chain disruptions witnessed over the past few years.

Countries including the United States, China, Japan and members of the European Union have announced large incentive programmes to attract semiconductor manufacturing.

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