What others took 40 years to build, India wants to achieve in 10-15 years, hopes Minister Ashwini Vaishnaw, as ISM 2.0 aims to reset the electronics and semiconductor roadmap with speed, scale, and sovereign ambition.
Announced at the Budget session on February 1, 2026, India is deepening its semiconductor push with the launch of India Semiconductor Mission (ISM) 2.0, a second-phase programme aimed at building a full-stack domestic ecosystem spanning equipment, materials, chip design and supply chains. The Finance Minister announced an initial provision of ₹10 billion for FY27.
According to the government, the expanded programme will support industry-led research and training centres, focused on developing critical technologies and a skilled workforce.
It will also prioritise the creation of Indian intellectual property across key systems such as compute, networking, RF and power management, with IP to be housed in a sovereign repository.
In an exclusive interaction with The Economic Times, the Minister of Electronics and Information Technology, Ashwini Vaishnaw, said ISM 2.0 builds on the foundations laid by ISM 1.0, which significantly expanded India’s semiconductor capabilities. The next phase, he said, is about compressing decades of global progress into a much shorter time frame. What others achieved in 40 years, India must compress into 10–15 years, he said to ET.
The broader Union Budget reinforces this direction. Allocations for the electronics component manufacturing scheme have been raised sharply, strengthening domestic value addition and reducing import dependence.
Electronics goods are now among India’s top three export categories, with the sector having grown sixfold over the past decade and exports rising eightfold.
Beyond semiconductors, the budget also pushes data centres, artificial intelligence and global capability centres (GCCs) as pillars of a deeper technology ecosystem. A 20-year tax holiday for AI data centres and simplified safe harbour rules for IT services are expected to attract large investments and ease compliance.
Vaishnaw said committed and proposed investments in data centres alone could exceed $200 billion.
Employment gains are central to the strategy. Electronics manufacturing currently employs about 2.5 million people, with component manufacturing expected to add another 2.5 million jobs. Combined with IT services and GCCs, the technology workforce already stands at around one crore.
With ISM 2.0, policymakers are betting that a stronger electronics and semiconductor base will anchor India’s ambitions as a global technology and manufacturing hub.
