India’s semiconductor drive is set for a major acceleration in 2026–27, with a sharpened focus on manufacturing, design and jobs under the revamped chip programme and the new India Semiconductor Mission (ISM) 2.0.
Together, they aim to shift India from being a large chip consumer to a serious global producer and design hub.
Bigger money, clearer targets
For 2026–27, the Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem carries a financial outlay of Rs 8,000 crore, aimed at speeding up investments and high-quality employment.
Within this, the Semiconductor Fabs Scheme will support at least one fab, targeting Rs 4,000 crore of investment in the year and 1,500 jobs.
The companion scheme for compound semiconductors, silicon photonics, sensors, discrete fabs and ATMP/OSAT units plans to support nine units, drawing in about Rs 11,000 crore in fresh investment and creating 3,000 jobs.
A Design Linked Incentive (DLI) scheme will back around 30 design companies, with goals of 10 new semiconductor IP cores and 200 additional design professionals in 2026–27.
How ISM 2.0 changes the game
Announced in the Union Budget 2026–27, ISM 2.0 adds a dedicated Rs 1,000-crore push for semiconductor equipment, materials and full-stack Indian chip intellectual property.
The new phase emphasises industry-led research and training centres, directly feeding into the manufacturing and design targets of the broader semiconductor programme.
This means that even as fabs and packaging units come up, India will be investing in the upstream technologies and skills needed to make the ecosystem truly self-reliant.
The vision is to be able to design and manufacture chips for 70–75 per cent of domestic applications by 2029 and climb into the league of top semiconductor nations by 2035.
What it means for India in 2026–27
If the projected targets are met, 2026–27 could see over Rs 15,000 crore in new semiconductor-related investments and at least 4,700 direct jobs across fabs, packaging units and design firms.
These capacities are expected to support key sectors such as consumer electronics, automobiles, telecom, power and aerospace, reducing import dependence and improving supply-chain resilience.
