The India Semiconductor Mission 2.0 (ISM 2.0) is a government-supported, industry-led initiative and a strategic concept that represents the second phase of India's push to create a self-sustaining semiconductor ecosystem. The foundation was laid with the approval of the original India Semiconductor Mission (ISM 1.0) by the Union Cabinet in December 2021, with a total financial commitment of ₹76,000 crore under the broader Semicon India Programme. The mission was created to reduce India's reliance on chip imports, strengthen supply chain security, and position the country as a global electronics manufacturing hub, addressing the strategic vulnerability exposed by global supply chain disruptions.
ISM 2.0 was announced in the Union Budget 2026-27, signaling a clear policy shift from the initial focus on ecosystem creation to ecosystem consolidation and global integration. While ISM 1.0 concentrated on attracting large manufacturing consortia for fabrication plants (fabs), display manufacturing, and packaging (ATMP) units, the new phase broadens the scope to address deeper layers of the value chain. The key mechanism of ISM 2.0 is its focus on four critical domains: promoting domestic production of semiconductor Equipment & Materials, developing Full-Stack Indian Intellectual Property (IP), fortifying Supply Chains, and establishing R&D Centres. The government allocated ₹1,000 crore specifically for ISM 2.0 for the fiscal year 2026-27 to drive capability building in these areas. The mission connects to the expanded Electronics Components Manufacturing Scheme (ECMS), which saw its outlay increased to ₹40,000 crore in the 2026-27 Budget, as ISM 2.0 ensures the availability of critical semiconductor inputs for the broader electronics value chain. The mission is administered by the India Semiconductor Mission, an independent business division within the Digital India Corporation.