Launch of the India Semiconductor Mission (ISM) 2.0 and ramp up in the outlay for the Electronic Component Manufacturing Scheme (ECMS) to Rs 40,000 crore are expected to bolster domestic production of equipment and materials, while also fortifying India's place in global supply chains.
ISM 2.0 has been one of the industry's top demands.
The first phase of the ISM has led to establishment of a new, foundational industry in India, union electronics and IT minister Ashwini Vaishnaw said. "ISM 2.0 will focus on indigenous designing and manufacturing of machines and materials used in the semiconductor ecosystem," he added.
Under ECMS, the initial allocation announced last year was Rs 22,919 crore. "We had received 249 responses to the ECMS scheme, much higher than the 50-55 we had initially expected to receive," Vaishnaw said. "The decision to raise allocation for ECMS to Rs 40,000 crore will maintain this momentum."
The increased ECMS outlay signals a very positive intent from the government's side to bolster domestic value addition, said Atul Lall, vice-chairman and managing director at Dixon Technologies (India). "This is likely to lead to substantial investments and will generate high-quality employment, and help India emerge as a crucial node in global supply chains."
The announcement to exempt foreign firms providing capital goods, equipment and tooling to India-based manufacturers from tax liabilities is a step towards making Indian electronics manufacturing more competitive, government sources said. Companies like Apple may benefit from this move.
The budget earmarked a total outlay of Rs 21,632.96 crore for the Ministry of Electronics and Information Technology, compared with the revised estimate of Rs 20,232.95 crore for 2025-26.
A major share of the funding has been directed towards semiconductor manufacturing, with schemes for the sector getting overall allocation of Rs 8,000 crore, compared with ₹4,300.08 crore in the previous year's revised estimates. ISM 2.0 received an allocation of Rs 1,000 crore.
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The first phase of the ISM has led to establishment of a new, foundational industry in India, union electronics and IT minister Ashwini Vaishnaw said. "ISM 2.0 will focus on indigenous designing and manufacturing of machines and materials used in the semiconductor ecosystem," he added.
Under ECMS, the initial allocation announced last year was Rs 22,919 crore. "We had received 249 responses to the ECMS scheme, much higher than the 50-55 we had initially expected to receive," Vaishnaw said. "The decision to raise allocation for ECMS to Rs 40,000 crore will maintain this momentum."
The increased ECMS outlay signals a very positive intent from the government's side to bolster domestic value addition, said Atul Lall, vice-chairman and managing director at Dixon Technologies (India). "This is likely to lead to substantial investments and will generate high-quality employment, and help India emerge as a crucial node in global supply chains."
The announcement to exempt foreign firms providing capital goods, equipment and tooling to India-based manufacturers from tax liabilities is a step towards making Indian electronics manufacturing more competitive, government sources said. Companies like Apple may benefit from this move.
The budget earmarked a total outlay of Rs 21,632.96 crore for the Ministry of Electronics and Information Technology, compared with the revised estimate of Rs 20,232.95 crore for 2025-26.
A major share of the funding has been directed towards semiconductor manufacturing, with schemes for the sector getting overall allocation of Rs 8,000 crore, compared with ₹4,300.08 crore in the previous year's revised estimates. ISM 2.0 received an allocation of Rs 1,000 crore.
