India plans to extend the tenure of the India Semiconductor Mission (ISM) 2.0. The centre is considering a 12-year implementation window rather than the current five-year framework.

The progress comes as New Delhi eyes sharpening its long-term semiconductor manufacturing and supply chain strategy.

The move is aimed at deepening India’s domestic chip ecosystem, supporting raw material suppliers and strengthening semiconductor design capabilities amid rising global competition in the sector.

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Building a Full Semiconductor Supply Chain, Beyond Fabrication

According to senior government officials, the proposed extension is intended to provide longer support and policy continuity for micro, small and MSMEs entering the semiconductor supply chain.

The focus under ISM 2.0 is expected to shift from fabrication and packaging alone to the broader ecosystem, including gases, ingots, speciality chemicals and other raw materials used in semiconductor manufacturing.

Officials said the second phase of the mission could witness an outlay of nearly ₹1.5 trillion.

The government is also eyeing increased support for semiconductor design firms that retain intellectual property (IP) in India, aligning with the country’s push for technology self-reliance and advanced electronics manufacturing.

The revised structure can likely reduce direct incentives for fabrication and packaging projects to around 30%, down from the flat 50% fiscal support offered during ISM 1.0.

The recalibration shows the government’s attempt to diversify the semiconductor ecosystem while simultaneously managing long-term public spending.

India launched its first massive ₹ 76,000-crore India Semiconductor Mission (ISM) in December 2021 to attract domestic and global investment in chip manufacturing. Since then, the government has approved 12 semiconductor manufacturing and packaging projects with a combined investment commitment exceeding ₹1.64 trillion.

Also Read: India’s Third Semiconductor Plant to Begin Operations in July, Fourth Unit by Year-End

New Projects, Global Partnerships Drive India’s Semiconductor Ambitions

The country’s semiconductor push has gathered pace over the last two years, beginning with the approval of Micron Technology’s chip packaging facility in Gujarat and later the semiconductor fabrication joint venture between the Tata Group and Powerchip Semiconductor Manufacturing Corporation.

Earlier this month, the Union Cabinet approved two additional semiconductor projects worth nearly ₹4,000 crore under ISM 1.0.

One of the projects, led by Crystal Matrix Limited, will manufacture Gallium Nitride semiconductor wafers for mini- and micro-LED displays. Another project by Suchi Semicon Limited focuses on packaging semiconductor chips for consumer appliances and electronics.

During the Union Budget 2026, Finance Minister Nirmala Sitharaman announced ISM 2.0, positioning semiconductor manufacturing, chip design and supply chain localisation on a strategic national priority.

Government officials have indicated that ISM 2.0 will prioritise domestic capability building in semiconductor materials, advanced packaging, research and workforce development, as India seeks to position itself as a global electronics and chip manufacturing hub under the broader Make in India strategy.