Budget 2026: India Launches Chip Mission 2.0, Targets Equipment and IP

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AuthorIshaan Verma|Published at:
Budget 2026: India Launches Chip Mission 2.0, Targets Equipment and IP
Overview

Finance Minister Nirmala Sitharaman launched India Semiconductor Mission (ISM) 2.0 in Budget 2026, aiming to deepen chip-making capabilities. The initiative will focus on producing critical equipment and materials, developing indigenous intellectual property, and strengthening domestic supply chains. This builds on the strong performance of the Electronics Components Manufacturing Scheme, which secured investment commitments far exceeding targets.

India Accelerates Semiconductor Ambitions with ISM 2.0

The rollout of India Semiconductor Mission (ISM) 2.0 signals a strategic acceleration of the nation's ambitions in the critical semiconductor sector. Finance Minister Nirmala Sitharaman announced the initiative in her Budget 2026 speech, emphasizing a move beyond existing capabilities to build a truly self-sufficient ecosystem.

This expanded mission will concentrate on the production of essential manufacturing equipment and raw materials, a crucial step in fortifying India's position in the global chip industry. A key objective is the development of full-stack Indian intellectual property, aiming to reduce reliance on foreign designs and foster indigenous innovation. Strengthening domestic supply chains is also paramount, ensuring greater resilience and control.

Building on Success: ECMS Outlay Increased

The government highlighted the significant success of the Electronics Components Manufacturing Scheme (ECMS), launched in April 2025 with an initial outlay of ₹22,919 crore. The scheme has already attracted investment pledges that have more than doubled the original targets. Capitalizing on this momentum, the government proposes to increase the ECMS outlay to ₹40,000 crore, underscoring strong investor confidence.

Talent Development a Core Focus

To support these ambitious manufacturing goals, ISM 2.0 will prioritize industry-driven research and training centers. The aim is to develop cutting-edge technology and cultivate a skilled workforce essential for complex semiconductor operations. This initiative aligns with broader government efforts, such as the Ministry of Electronics and Information Technology's plan to roll out AI training across 500 universities, building on existing chip design training programs involving 315 institutions. Union Minister Ashwini Vaishnaw confirmed that curricula are being refined with industry input to ensure market relevance for future AI and semiconductor missions.

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