India Semiconductor Mission (ISM) 2.0
Info Nuggets
Building on the foundational success of ISM 1.0, the second phase focuses on indigenous equipment, materials and deep-tech design to secure India’s ‘Silicon Future’
The concept
Launched in the Union Budget 2026-27, ISM 2.0 marks a strategic shift from merely attracting foreign manufacturing to building an end-to-end indigenous semiconductor ecosystem. While ISM 1.0 focused on “Fabs” and “ATMP” units, the new phase emphasises the production of semiconductor chemicals, gases, specialised equipment and the creation of homegrown Intellectual Property (IP).
Why it matters
Commercial realisation: 2026 is a landmark year as four major units — Micron, Tata Electronics (Assam), CG Power and Kaynes Technology — transition from pilot runs to commercial-scale production.
Strategic sovereignty: By incentivising the domestic manufacturing of “upstream” components like photoresists and high-purity gases, India aims to insulate itself from global supply chain shocks and “technological blockades”.
Advanced research: ISM 2.0 introduces industry-led research centres to develop advanced nodes (below 28nm) and compound semiconductors, which are critical for AI data centres, electric vehicles (EVs) and 6G defence systems.
IP & design: The Design Linked Incentive (DLI) scheme has been bolstered to support over 24 startups, resulting in “Made-in-India” chips like the DHRUV64 processor.
Key milestones
Dholera fab: India’s first commercial mega-fab (Tata-PSMC) is now integrating ASML lithography equipment, a move that places India on the global high-tech map.
Jewar hub: In February 2026, the foundation was laid for the HCL-Foxconn JV in Uttar Pradesh, focusing on specialised chips for the automotive and consumer electronics sectors.
Final outlook
ISM 2.0 transforms India from a “consumer” of chips to a “credible global participant”. By focusing on the entire value chain, from raw minerals to final packaging, India is ensuring that its digital growth is powered by its own “silicon heart”, paving the way for a truly Aatmanirbhar Viksit Bharat.
