The Indian government approved ₹1.27 lakh crore for the second edition of the India Semiconductor Mission (ISM 2.0) on July 15, aiming to enhance the country's semiconductor capabilities. Union IT Minister Ashwini Vaishnaw announced the decision, which is expected to strengthen India's position in the global semiconductor market.
Key Details
The initiative, highlighted in Finance Minister Nirmala Sitharaman's Union Budget 2026–27 speech, focuses on producing semiconductor equipment and materials domestically, developing full-stack Indian semiconductor intellectual property, and improving both domestic and global supply chains. Industry estimates suggest that the Indian semiconductor market, valued between $45 billion and $50 billion in 2024-2025, could grow to $100 billion to $110 billion by 2030.
Semiconductors are essential for various sectors, including electronics, telecommunications, and defense. While experts view the long-term potential of the semiconductor sector positively, they caution investors against expecting quick returns. Harshal Dasani, Business Head at INVAsset PMS, noted that unlike the defense sector, which has established manufacturing capabilities and visible government orders, the semiconductor industry requires significant technological depth, specialized talent, and substantial capital commitments before achieving sustainable profitability.
Background
For more on India's growing role in semiconductor supply chains, see India’s Role in Semiconductor Supply Chains Grows Under Pax.
The approval is likely to boost investor interest in semiconductor stocks and related sectors, as the government’s commitment to the industry may enhance growth prospects. Investors will watch for the implementation details of ISM 2.0 and any subsequent announcements regarding partnerships or investments in the semiconductor space.