The Finance Ministry’s Expenditure Finance Committee (EFC) has given the green light to an outlay of Rs 1.25 lakh crore for the India Semiconductor Mission (ISM) 2.0. This move sets the stage for the next phase of India’s semiconductor manufacturing drive. The proposal, sanctioned by the committee last week, is now awaiting final approval from the Union Cabinet.
This proposed outlay represents a substantial increase from the Rs 76,000 crore allocated in ISM 1.0. The initial phase saw the government approving 10 semiconductor facilities covering chip fabrication, assembly, and design. The expanded scheme aims to bolster the broader ecosystem, including areas like industrial gases, specialty chemicals, capital equipment, MSMEs, and ancillary suppliers, with the goal of fortifying India’s semiconductor supply chain.
The government anticipates that the enhanced program will enable India to fulfill up to 75% of its domestic semiconductor demand by 2030. This strategic move aims to reduce import reliance and align with India’s ambition of emerging as a global electronics manufacturing hub. Inter-ministerial consultations have already been conducted for the launch of the new scheme, with the Ministry of Electronics and Information Technology awaiting the Finance Ministry’s nod.
India’s electronics consumption and production are rapidly expanding, with over 65 crore smartphone users and an annual electronics manufacturing output of Rs 12 lakh crore. Simultaneously, the country is venturing into AI-based systems, data centers, and electric vehicles that heavily rely on semiconductor chips. Given the surge in demand and innovation, securing a position in the global semiconductor value chain is crucial for India’s technological advancement.
Under the India Semiconductor Mission, 10 semiconductor plants have been given the go-ahead. Construction is progressing swiftly, with a pilot production line already operational in Gujarat’s Sanand. Within a year, four more units are slated to commence production. Noteworthy global players like Applied Materials, Lam Research, Merck, and Linde are investing in supporting factories and supply chains.
