Budget 2026: Nirmala Sitharaman unveils Semiconductor Mission 2.0, widens chip push to equipment, materials and IP

India will widen its push to build a domestic semiconductor industry, moving beyond chip fabrication to focus on equipment, materials and locally developed intellectual property, Finance Minister Nirmala Sitharaman said on February 1.

Presenting her ninth budget to the Lok Sabha, Sitharaman announced the launch of India Semiconductor Mission 2.0, signalling a shift in policy toward strengthening deeper layers of the chip ecosystem.

Under the revamped programme, the government will prioritise domestic production of semiconductor equipment and materials, encourage the design of Indian intellectual property and work to strengthen supply chains, Sitharaman said.

India has been seeking to position itself as an alternative manufacturing hub as global companies look to diversify chip supply chains amid geopolitical tensions and rising demand from artificial intelligence and advanced computing.

The government also increased the allocation for the Electronics Component Manufacturing Scheme to Rs 40,000 crore, underscoring its push to expand component-level manufacturing alongside finished electronics. 

“The outlay for the ECMS has been increased to Rs 40,000 crore, in line with the large number of proposals received. This enhanced allocation ensures that funding constraints do not limit component manufacturers, underscoring the government’s seriousness in developing a robust electronics component ecosystem in India. This will help to increase the true local value addition in India,” Tarun Pathak, research director at Counterpoint Research, told Business Today.

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