India Semiconductor Mission – Semicon India Programme 2.0

India’s semiconductor sector has recently received a significant boost with the Indian government’s cabinet approval for the second edition of the Semicon India Programme (Semicon 2.0). With a budgetary outlay of more than USD 10 billion, the initiative highlights the Indian government’s commitment to enhancing the nation’s position in the global semiconductor value chain and fostering a resilient, self-reliant semiconductor industry.

Building on the success of the first edition of the programme (Semicon 1.0), the industry has grown from USD 38 billion in 2023 to an estimated USD 45–50 billion in 2024–25. Industry estimates expect the sector to further double in size by 2030.

Over the next five years, the scheme is expected to attract investment of more than USD 42 billion, generate USD 21 billion in semiconductor production, and deliver nearly USD 10 billion in exports. 

Inviting Investments, Accelerating Domestic Growth 

The bedrock of Semicon 2.0 is laid down by the initial success gained by Semicon 1.0 under which 12 (twelve) manufacturing units received a cumulative investment of over USD 17.26 billion. As of 2026, 3 (three) projects, namely Micron, Kaynes and CG Semi/CG Power, have already begun commercial production. Within the design ecosystem, 24 startups and micro, small, and medium enterprises (MSMEs) received financial support for design projects and 103 startups and MSMEs gained access to industry-standard electronic design automation (EDA) tools. 

Semicon 2.0 adopts a holistic approach to accelerate domestic manufacturing by promoting indigenous chip design, enhancing supply chain resilience, advancing research & development (R&D), and developing a skilled talent pool.

Six Pillars of Semicon 2.0 

Semicon 2.0 is based on six pillars that collectively aim to create a resilient and globally competitive semiconductor ecosystem in India:

1. Design: The design pillar focuses on fostering domestic chip and intellectual property (IP) development by providing startups and MSMEs with seed funding, EDA tool access, and deployment-linked incentives. 
2. Machines and Materials: This pillar promotes domestic manufacturing of semiconductor equipment, materials, chemicals, and gases to build a sustainable semiconductor ecosystem and gradually reduce dependence on imports. 
3. Fabrication: Accelerating India’s manufacturing capacity is attention of this pillar, based on inviting investments in silicon, compound semiconductor, discrete component, and display fabs. Complementary metal-oxide-semiconductor (CMOS) based silicon fabs are eligible for 40% capital expenditure support, and all other fabs are eligible for 35% capital expenditure support.
4. Assembly and Packaging Units: By leveraging the momentum received by Assembly, Test, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) investments under the previous phase, Semicon 2.0 provides for 35% capital expenditure support to advanced packaging projects and 25% capital expenditure support for conventional packaging facilities. 
5. Research & Development: R&D initiatives focus on next generation semiconductor technologies by moving from 28 - 110 nanometre nodes to advanced nodes through collaborations between domestic and international R&D centres. 
6. Talent Development: The talent development pillar places prominence on a skilled semiconductor workforce through industry-led training, academic partnerships and hands-on exposure to chip design, fabs, packaging, cleanroom operations, and fab construction. 

Growing opportunities for Investors 

1. Joint ventures (JVs) in equipment, materials and component manufacturing: As India's fabrication plants and OSAT facilities continue to rely heavily on imported inputs, global equipment and materials companies can partner with Indian manufacturers through JVs or licensing agreements to localise production. These partnerships can unlock the benefit of 30-40% capital expenditure support for setting up fabrication plants.
2. Design and IP Development: Government support to startups and MSMEs involved in semiconductor design value chains through seed funding, EDA tool access and deployment-linked incentives, positions the sector as an innovation-driven opportunity for less capital-intensive investments. 
3. Research & Technology Partnerships: The enhanced focus on next-generation semiconductor technologies, coupled with incentives for R&D support and talent development, opens new doors for collaborations between Indian institutions and global technology companies in research, IP development and workforce capacity building. 

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