Union Budget 2026: India gets Rs 40,000 crore boost for Semiconductor Mission 2.0

Finance Minister Nirmala Sitharaman declared the extension of the India Semiconductor Mission to a new phase known as Semiconductor Mission 2.0 in the Union Budget 2026-27.This mission has been allocated at Rs 40,000 crore for the infrastructure and establishment on semiconductor industry in India. This is to improve India’s status in chip production and reduce reliance on imports.

What Is India Semiconductor Mission 2.0

India’s Semiconductor Mission was initially introduced in 2021 as a part of the Ministry of Electronics and Information Technology. It aims at creating a complete semiconductor ecosystem in India. This involves designing of the chips, fabrication, testing and packaging. Through Mission 2.0, it is no longer about factories but about materials and equipment and Indian intellectual property.

What’s Included

The push towards industry based research and training facilities is one of the significant changes in Semiconductor Mission 2.0. The government would like firms to contribute more in the training of engineers and technicians within India. This will aid in developing a skilled workforce which will be informed on the design, testing and manufacturing of chips. It also favors the long-term development of the electronic and AI-related industry.

Manufacturing and Supply Chains

The Rs 40,000 crore financing will assist in accelerating the projects which were initiated in the past but required additional finance. The chip firms worldwide are favorable to consistent policies and extended financing. This budget is a clear indication that India is determined to become a trusted semiconductor market. The mission is also set to reinforce supplies chains and eliminate risks associated with worldwide shortages.

States Involved

The government will focus on states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. These states are well endowed in terms of ports, power supply and availability of raw materials. Enhancing these areas will ensure that the supply chain of semiconductor in India is more stable and efficient.

Establishment of Chemical Parks

The other significant announcement is the intention to establish three special chemical parks. The parks will be developed on the basis of a challenge model. Special chemicals and gases are very important in semiconductor manufacturing. The local chemical parks will lead to decreased imports and lower cost as well as faster production.

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What’s Ahead

Semiconductor Mission 2.0 exhibits a long term plan. It is not merely the matter of creating chips. It is concerning the development of capabilities, resources, industries and good involvement of the states. With proper execution, India can transition into a global supplier in the next few years as opposed to being a chip consumer.