The India Semiconductor Mission (ISM) is a government-led initiative, established as a dedicated institution within the Digital India Corporation, under the Ministry of Electronics and Information Technology (MeitY). The mission was created in December 2021 with an initial incentive framework of ₹76,000 crore to develop a sustainable semiconductor and display manufacturing ecosystem in the country. The ISM was launched to address the problem of India's heavy reliance on imported semiconductors, which is a matter of economic and national security, especially after global supply chain disruptions like those seen during the COVID-19 pandemic.
The core mechanism of the ISM is to provide significant fiscal support to attract large-scale investments across the semiconductor value chain. Key provisions include extending fiscal support of up to 50% of the project cost for setting up Silicon Semiconductor Fabs and Display Fabs on a pari-passu basis. It also offers 50% of capital expenditure for Compound Semiconductors/Silicon Photonics/Sensors Fabs and Semiconductor Packaging (ATMP/OSAT) units. The ISM acts as the nodal agency for the efficient implementation of the schemes under the broader Semicon India Programme.
The ISM connects directly to the government's vision of Atmanirbhar Bharat (Self-Reliant India) and the Make in India initiative. It is also closely linked to the Design Linked Incentive (DLI) Scheme, which supports domestic companies in semiconductor design. Recently, the mission has evolved with the announcement of ISM 2.0 in the Union Budget 2026–27. While the initial phase focused on establishing fabrication and assembly infrastructure, ISM 2.0 expands the focus to ecosystem deepening, including producing semiconductor equipment and materials, designing full-stack Indian semiconductor Intellectual Property (IP), and fortifying supply chain resilience. The core incentive structure for fabs and packaging units has largely stayed the same, but the focus has shifted from ecosystem initiation to consolidation and advanced manufacturing, with a roadmap to achieve 3-nanometre and 2-nanometre technology nodes.