Cabinet Approves ₹1.27 Lakh Crore Semicon 2.0 to Accelerate India’s Semiconductor Mission
In a major push to transform India into a global semiconductor powerhouse, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Semicon 2.0 programme with a total budget outlay of ₹1,27,500 crore. The new initiative is designed to strengthen India’s semiconductor design and manufacturing ecosystem through sustained long-term policy support while building on the progress made under the Semicon 1.0 programme.
The government said Semicon 2.0 reflects its commitment to placing India firmly on the global semiconductor map by creating a comprehensive ecosystem that spans chip design, manufacturing, research, advanced packaging, talent development and supply chain capabilities. The initiative is expected to support economic growth, enhance technological self-reliance and strengthen national security by improving resilience in semiconductor supply chains.
The programme is built around six key pillars, each targeting a critical segment of the semiconductor value chain.
The first pillar focuses on semiconductor design. Following the success of the first phase, in which 105 startups began developing semiconductor chips, the government aims to deepen India’s chip design capabilities by supporting the creation of intellectual property (IP), advanced chip designs and complete semiconductor systems. The objective is to position India as a leading global hub for semiconductor design and IP development.
The second pillar aims to develop the domestic ecosystem for semiconductor manufacturing equipment, materials, chemicals and industrial gases. Companies engaged in manufacturing or research and development of semiconductor production machinery, precision equipment and essential raw materials will receive incentives. Officials believe this will create a sustainable supply chain while also strengthening India’s precision manufacturing sector.
The third pillar focuses on attracting more investments for establishing semiconductor fabrication plants (fabs) in India. With the country’s first silicon fabrication facility expected to be commissioned by 2028, the government plans to leverage growing international confidence in India’s semiconductor strategy to attract additional investments in silicon fabs, compound semiconductor fabs, discrete semiconductor units and display fabrication facilities.
The fourth pillar seeks to further strengthen India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) industry. Following the success of the first round of packaging projects, India is increasingly being viewed as an alternative global destination for semiconductor packaging. The government intends to encourage investments in advanced ATMP technologies to enhance India’s competitiveness in this critical segment.
The fifth pillar emphasises research and development. While India’s semiconductor journey has initially focused on manufacturing chips using 28-nanometre to 110-nanometre process nodes, the new programme will support research into more advanced semiconductor technologies and fabrication nodes. Collaboration with leading domestic and international research institutions will play a key role in achieving this objective.
The sixth pillar addresses talent development. The government noted that 315 universities are already training students in advanced chip design using industry-standard Electronic Design Automation (EDA) tools, with around 68,000 students trained so far. Semicon 2.0 will expand these efforts through deeper academic training and increased industry participation in specialised areas such as clean-room operations, fabrication plant construction and semiconductor manufacturing processes.
The government believes that creating a complete semiconductor ecosystem—from design and research to manufacturing and packaging—will significantly boost India’s technological capabilities while generating employment, attracting foreign investment and supporting high-value manufacturing.
The Cabinet also reviewed the progress achieved under Semicon 1.0, which has laid the foundation for India’s semiconductor ambitions.
Under the manufacturing component, 12 semiconductor projects have so far been approved, representing a cumulative investment of more than ₹1.64 lakh crore. These include one silicon fabrication plant, one silicon carbide fabrication unit, an integrated Gallium Nitride (GaN) Micro LED Display Fab, and nine semiconductor packaging facilities. These projects are expected to serve sectors including consumer electronics, automobiles, industrial electronics, power electronics, telecommunications and aerospace.
Commercial production has already commenced at facilities established by Micron, Kaynes and CG Semi, while another approved project is expected to begin production during 2026.
On the design front, 24 semiconductor design projects from startups and MSMEs have received financial support. In addition, 105 startups and MSMEs have been provided access to industry-standard EDA software tools. These companies are developing chips and System-on-Chip (SoC) solutions for strategic and commercial applications such as satellite communications, drones, surveillance systems, Internet of Things (IoT) devices, LED drivers, artificial intelligence platforms, telecom equipment and smart meters.
Most of these projects are currently at various stages of design and prototyping and are expected to move into commercial deployment after successful validation.
With the approval of Semicon 2.0, the government aims to accelerate India’s emergence as a trusted global semiconductor destination while reducing dependence on imports, strengthening strategic industries and supporting the vision of an Atmanirbhar Bharat in advanced electronics and chip manufacturing.
