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The Government of India has launched India Semiconductor Mission (ISM) 2.0, a major strategic initiative aimed at expanding and deepening the country’s semiconductor and electronics manufacturing ecosystem. Announced in the Union Budget 2026, the programme includes an increased "Electronic Component Manufacturing Scheme" (ECMS) outlay of ₹40,000 crore and a dedicated budget for rolling out the next phase of India’s semiconductor strategy.

ISM 2.0 succeeds the first phase of the India Semiconductor Mission, which was initially rolled out to build semiconductor fabs, ATMP (Assembly, Testing, Marking & Packaging) facilities, and display manufacturing units. Under the original mission, multiple projects across India have been approved, with cumulative investments exceeding ₹1.6 lakh crore.

The expanded strategy places strong emphasis on strengthening domestic manufacturing capacity, developing supply chains, supporting design and R&D ecosystems, and increasing technological capabilities across the semiconductor value chain. The government’s focus on semiconductor equipment, materials, and associated technologies is also expected to drive innovation and attract further foreign investment into India’s semiconductor sector.

Gujarat — and in particular Dholera Smart City — is set to benefit significantly from the ISM 2.0 framework. The region already hosts some of India’s largest semiconductor investments, including a major semiconductor fabrication project led by Tata Electronics in partnership with Taiwan’s PSMC, with an investment exceeding ₹90,000 crore. This facility is expected to produce tens of thousands of wafers per month once operational, creating thousands of jobs and positioning Dholera as a key manufacturing hub in India’s semiconductor ecosystem.

Industry experts say that ISM 2.0’s broader focus on supporting end-to-end semiconductor manufacturing — from raw materials to chip design and fabrication — will help reduce India’s dependence on imports, strengthen supply-chain resilience, and spur domestic production for key sectors such as automotive electronics, telecommunications, renewable energy systems, and defense. Analysts also believe that aligning incentives with infrastructure readiness in regions such as Dholera will accelerate investment flows and strengthen India’s place in the global semiconductor value chain.

The launch of ISM 2.0 reflects the government’s long-term commitment to building a competitive and self-reliant semiconductor ecosystem, supporting industrial growth, technology leadership, and job creation in the years ahead.