Finance Ministry panel clears Rs 1.25 lakh cr outlay for ISM 2.0

The expenditure department under the Finance Ministry has cleared a Budget proposal entailing an allocation of Rs 1.25 lakh crore for India Semiconductor Mission 2.0, as the country looks to advance global chip-making ambitions and cement its position as a semiconductor destination for the world, according to sources.

The approval is significant as it is higher than the outlay of Rs 76,000 crore earmarked for ISM 1.0. Sources said that the Expenditure Finance Committee has greenlit the Rs 1.25 lakh crore outlay for ISM 2.0, and that the same will be placed before the Cabinet. The Budget, in February, had sought to give a big boost to the country’s manufacturing prowess announcing, among various measures, the second edition of India Semiconductor Mission with a broad objective to promote chip manufacturing ecosystem in the country, covering equipment, materials, indigenous designs and other related components. The government has maintained that India Semiconductor Mission 2.0 - announced in the Union Budget 2026-27 - signals India’s deep commitment to chip manufacturing, with a focus on semiconductor equipment, materials, indigenous intellectual property and resilient supply chains. 

Union Minister for Electronics and IT Ashwini Vaishnaw had earlier said that the India Semiconductor Mission 2.0 will prioritise indigenous chip design, productisation, attracting ecosystem partners and development of talent.

As many as 12 semiconductor manufacturing projects have been approved with an investment pipeline of about Rs 1.64 lakh crore under the India Semiconductor Mission, including one semiconductor fabrication unit, two compound semiconductor fabrication units and nine packaging units. On the design side, 24 projects are being supported under the Design Linked Incentive Scheme, 105 companies have been assisted with advanced chip design tools and 23 design ‘tapeouts’ have been completed at various foundries, including at advanced nodes, reflecting India’s growing depth in semiconductor design.