India to push ISM 2.0 with Rs 1.25 lakh crore
Cabinet expected to approve a Rs 1.25 lakh crore second phase to expand equipment manufacturing and draw foreign semiconductor firms.
Mateo Fernandez ·
The Cabinet is expected to approve the second phase of the India Semiconductor Mission (ISM 2.0), with an outlay of around Rs 1.25 lakh crore, officials said. Reaction pending.
ISM 2.0 allocation
Officials said the proposed allocation of around Rs 1.25 lakh crore is substantially larger than the Rs 76,000 crore committed in the programme's first phase. The expansion is aimed at scaling fabrication-linked incentives and creating a more attractive market for upstream suppliers.
Officials said US, European and Japanese firms are positioning for a bigger role in equipment manufacturing and supply chains tied to ISM 2.0. The move is expected to open procurement opportunities for global vendors and to push more capital expenditure into local tooling and assembly operations.
Officials said the policy shift signals a priority on building domestic production of semiconductor equipment rather than only chip fabrication. That could reshape vendor relationships, with multinational suppliers negotiating local partnerships, technology transfers and manufacturing lines in India.
Watch for a final Cabinet decision by July 20, 2026; if approved, officials are likely to release detailed incentive rules and application windows in the ensuing weeks.