The announcement of the India Semiconductor Mission 2.0 (ISM 2.0) is expected to give a big push to the semiconductor sector, and the ₹40,000 crore outlay is likely to catalyse private investment in the sector. Experts said that this is not merely a manufacturing initiative; it represents a strategic reset of India’s technology ambition. The move is also expected to strengthen chip design and advanced engineering capabilities, and generate immediate spillovers for IT services, electronics manufacturing, and deep-tech startups.
“Crucially, by extending support beyond fabs to equipment, materials, and full-stack IP, the mission addresses a key bottleneck in India’s tech ecosystem control over critical technologies. Over the long term, it positions India not just as a downstream adopter but as a creator of foundational digital infrastructure, driving resilient exports, higher-value innovation, and sustained competitiveness in the global technology economy,” remarked Raja Lahiri, Partner and IT & ITes Leader, Grant Thornton Bharat.
Indian Semiconductor business is, however, still at a very nascent stage and needs a lot of hand-holding and policy support. “ISM 2.0 will certainly help in mushrooming genuine semicon use cases and will make India self-reliant. The ₹40000 crore deployment for electronic components will help resolve supply issues for development. Both the initiatives will help the industry a lot, great policy decision by FM,” pointed out Anil Joshi, Managing Partner, Unicorn India Ventures.
Industry stakeholders feel that the launch of India Semiconductor Mission 2.0 in the Union Budget 2026-27 is a watershed moment for India’s technology and manufacturing landscape. By significantly expanding support for domestic semiconductor equipment, materials, design, and supply-chain capabilities, ISM 2.0 is expected to accelerate India’s journey towards self-reliance in advanced chips and position the country as a globally competitive semiconductor hub.
“Along with the ISM 2.0, the strategic decision to establish dedicated rare earth corridors across mineral-rich states, strengthening mining, processing, research and manufacturing of critical minerals, this budget not only deepens the foundation for high-tech growth but also enhances supply-chain resilience in sectors from electronics to defence and clean energy. Together, these initiatives will drive innovation, high-skilled employment, and India’s role in resilient global value chains,” said Manu Iyer, General Partner and Co-founder, Bluehill.VC.
It is expected that the government’s push to develop rare earth corridors across Odisha, Kerala, Andhra Pradesh, and Tamil Nadu is a strategic move to secure India’s critical mineral supply chain and reduce reliance on China, particularly for rare earth magnets used in electronics, EVs, and defence applications.
“The focus on integrated exploration, mining, refining, and downstream manufacturing enhances domestic value addition and supports India’s high-tech manufacturing ambitions. This is structurally positive for players like Gujarat Mineral Development Corporation, which operates across the rare earth value chain from ore beneficiation to magnet manufacturing. Additionally, NLC India Limited’s collaboration with IREL (India) Limited strengthens execution capability in rare earth mining and processing, positioning these firms as long-term beneficiaries of this policy thrust,” said Divyam Mour, Research Analyst, SAMCO Securities.