India Semiconductor Mission (ISM) 2.0
Why in news?
India Semiconductor Mission (ISM) 2.0 was launched in the Union Budget 2026 with a ₹40,000 crore outlay. It focuses on strengthening India’s semiconductor ecosystem by supporting equipment and material production, developing full-stack Indian intellectual property (IP), and building supply chain resilience.
Key Highlights of ISM 2.0
- Budget Allocation: ₹40,000 crore dedicated to semiconductor development.
- Focus Areas:
- Production of semiconductor equipment and materials.
- Development of full-stack Indian IP for chip design.
- Strengthening domestic supply chains to reduce import dependence.
- Research & Training: Establishment of industry-led research and training centres to build a skilled workforce.
- Expansion of Electronics Component Manufacturing Scheme (ECMS): Outlay increased to ₹40,000 crore to deepen electronics manufacturing.
Objectives of ISM 2.0
- Move up the value chain: Support Indian companies in chip design and fabrication.
- Global competitiveness: Position India as a hub for semiconductor and display manufacturing.
- Workforce development: Train engineers and researchers in advanced semiconductor technologies.
- Supply chain resilience: Reduce reliance on imports and secure critical components.
Strategic Importance
- National Security: Chips are critical for defense, telecom, and strategic sectors.
- Economic Growth: Boosts electronics exports and reduces import bill.
- Innovation: Encourages Indian universities and startups to participate in chip design.
Risks & Challenges
- High Capital Intensity: Semiconductor fabs require billions in investment.
- Global Competition: Countries like the US, Taiwan, and South Korea dominate the sector.
- Technology Gaps: India must bridge expertise in advanced nodes (below 10nm).
- Supply Chain Dependencies: Raw materials and rare earths remain globally concentrated.
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