India has taken another major step to strengthen its India semiconductor mission.
The Union Cabinet has approved Semiconductor Mission Phase 2 with an outlay of Rs 1.27 lakh crore. The move aims to boost chip manufacturing, design, and the complete electronics supply chain.
The decision also supports India's goal of becoming a global semiconductor hub. The India semiconductor mission is expected to attract huge investments and reduce the country's dependence on imported chips.
The Cabinet also approved the second phase of the Mobile Phone Manufacturing Scheme with an outlay of Rs 62,500 crore. The new package is expected to support domestic manufacturing and increase exports. It also builds on the progress made under the first phase of the semiconductor program.
Union Electronics and Information Technology Minister Ashwini Vaishnaw said the semiconductor industry is the foundation of modern technology. He said every electronic device depends on semiconductor chips. He added that the entire electronics value chain is now covered under the government's plan.
Under the second phase, the government will offer a mix of grants and equity investments. The support will help companies design both strategic and commercial chips in India.
The government will also provide a flat 30 percent incentive. The benefit will cover the manufacturing of semiconductor equipment, chemicals, gases, and materials.
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According to Vaishnaw, the second phase could attract investments worth Rs 4 lakh crore. The government expects production worth Rs 2 lakh crore under the program.
The plan also aims to generate Rs 1 lakh crore in semiconductor exports. The government believes this will improve India's position in the global electronics market.
The latest approval comes as India continues expanding its semiconductor manufacturing capacity.
As of July 15, 2026, the government has approved 12 semiconductor manufacturing and packaging projects. These projects have attracted cumulative investments of more than Rs 1.60 lakh crore.
Out of these 12 projects, three have already started commercial production. This marks an important milestone for India's semiconductor industry.
The flagship semiconductor program was first approved in December 2021. The total outlay at that time was Rs 76,000 crore.
The first project received approval in June 2023. Micron was cleared to set up a semiconductor Assembly, Testing, Marking, and Packaging facility in Sanand, Gujarat. The project involved an investment of USD 2.75 billion.
Later in 2023, the government approved India's first semiconductor fabrication plant. The project is a joint venture between Tata Group and Taiwan's Powerchip Semiconductor Manufacturing Corporation. The proposed investment stands at nearly USD 11 billion, or around Rs 91,000 crore.
With the second phase now approved, the government hopes to accelerate chip production, attract global investors, and strengthen India's electronics manufacturing ecosystem.
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