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Cabinet Approves Semiconductor Mission 2.0 with ₹1.27 Lakh Crore Outlay for Chip Supply Chain Subsidies

EconomyScience & TechPolityCORE
Target:UPSC GS-IIIMPSCSSC GATeachingPrelims HighMains HighStatic GK Link
15 Jul 2026
~2 min
Source: Indian Express
Key Data:₹1.27 lakh crore outlay6 years durationSilicon fab subsidy 40%Other fab subsidy 35%Advanced packaging subsidy 35%Conventional packaging subsidy 25%
Bodies:Union CabinetMinistry of Electronics and Information Technology
Practice MCQs from today's news ▸
What This Article Covers

1.Cabinet approves ISM 2.0 with ₹1.27 lakh crore outlay for six years, focusing on subsidising gases, chemicals, and ancillary industries around chip manufacturing.

2.Incentives reduced: silicon fabs get 40% (down from 50%), other fabs 35%, advanced packaging 35%, conventional packaging 25%.

3.India aims to design and manufacture chips for 70-75% domestic applications by 2029 and become among top semiconductor nations by 2035.

The Big Picture
Prelims · HighMains · High

The Union Cabinet approved Semiconductor Mission 2.0 (ISM 2.0) with a ₹1.27 lakh crore outlay over six years, shifting focus from uniform capex subsidies to targeted incentives for chip manufacturing supply chain and R&D. This strategic push aims to make India a top semiconductor nation by 2035, critical for students tracking Make in India, electronics manufacturing, and geopolitics of chips.

Exam Lens

Quick Exam Facts From News

Scheme NameIndia Semiconductor Mission (ISM) 2.0
Total Outlay₹1.27 lakh crore
Scheme Duration6 years
Silicon Fab Subsidy40% (down from 50% in ISM 1.0)
Other Fab Subsidy35%
Advanced Packaging Subsidy35%
Conventional Packaging Subsidy25%
Target: Domestic Chip Needs by 202970-75%
Total Plants Approved Under ISM 1.012
Key Plant in OperationMicron, Kaynes Semicon, CG Semi (commercial production started)

1-Minute Revision

  • ›Scheme Name: India Semiconductor Mission (ISM) 2.0
  • ›Total Outlay: ₹1.27 lakh crore
  • ›Target this Data: Outlay ₹1.27 lakh crore, duration 6 years, subsidy for silicon fabs 40%, other fabs 35%, advanced packaging 35%, conventional packaging 25%.
  • ›Target this Nodal Body: Union Cabinet (under Ministry of Electronics and IT). Also note: India Semiconductor Mission (ISM) — initially launched in 2021.
  • ›Target this Fact: Total 12 chip plants approved under ISM 1.0, with three (Micron, Kaynes Semicon, CG Semi) having started commercial production.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which ministry is primarily responsible for implementing the India Semiconductor Mission?

Q2Statement-basedHard

Consider the following statements regarding India Semiconductor Mission (ISM) 2.0:

1. ISM 2.0 offers a uniform capex subsidy of 50% for all chip manufacturing plants.

2. The scheme has an outlay of Rs 1.27 lakh crore and a duration of six years.

3. ISM 2.0 includes subsidies for research and development and talent development in the semiconductor sector.

Which of the statements given above is/are correct?

Q3Data-centricMedium

What is the capital expenditure subsidy offered under ISM 2.0 for silicon fabrication plants?

Q4Application/ImpactMedium

What is the primary strategic objective of introducing ISM 2.0?

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