Cabinet clears ₹1,27,500 crore Semicon 2.0 to deepen India's chip ecosystem; focus on design, fabs, R&D and talent

The Union Cabinet on Wednesday approved Semicon 2.0 with a total outlay of ₹1,27,500 crore, significantly expanding the Centre's long-term push to build a globally competitive semiconductor design and manufacturing ecosystem. The programme builds on the progress made under the India Semiconductor Mission (ISM) 1.0 and seeks to accelerate investments across the semiconductor value chain amid rising global demand for resilient chip supply chains.

The revamped scheme adopts a comprehensive approach to developing the domestic semiconductor ecosystem by supporting chip design, manufacturing equipment and materials, fabrication units, advanced packaging facilities, research and development (R&D), and skilled manpower. The government said the initiative will strengthen India's technological capabilities, improve supply chain resilience, support economic growth across sectors and enhance national security.

Six-pronged strategy to scale semiconductor ecosystem

Semicon 2.0 is built around six strategic pillars. These include strengthening India's chip design capabilities by supporting the development of semiconductor intellectual property (IP), chip and system designs, incentivising the production of semiconductor manufacturing equipment, specialty materials, chemicals and gases, and attracting investments in silicon fabs, compound semiconductor fabs, discrete component fabs and display fabs.

The policy will also further strengthen the Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) ecosystem by promoting advanced packaging technologies. In addition, the government plans to accelerate research into advanced semiconductor nodes beyond the current 28nm-110nm technology range through collaborations with leading domestic and international R&D institutions.

ISM 1.0 lays the foundation

The Cabinet noted that 12 semiconductor manufacturing units with a cumulative investment of over ₹1,64,000 crore have already been approved under ISM 1.0. These include one silicon fab, one silicon carbide fab, one integrated gallium nitride Micro LED display fab and nine packaging units, catering to sectors such as consumer electronics, industrial equipment, automobiles, telecommunications, aerospace and power electronics.

Commercial production has already commenced at Micron, Kaynes and CG Semi, while another approved manufacturing unit is expected to begin production in 2026. The government's first semiconductor fabrication facility under the mission is scheduled to be commissioned in 2028, a milestone expected to strengthen investor confidence in India's semiconductor manufacturing ambitions.

Cabinet approves ₹62,500-crore cellphone one manufacturing scheme

In a bid to sustain India's rapid rise as a global smartphone manufacturing hub, the Union Cabinet on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, replacing the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing that concluded on March 31, 2026.

The five-year scheme, spanning FY27 to FY31, aims to scale up domestic mobile phone production, deepen local value addition, strengthen supply chain resilience and improve India's competitiveness in global electronics manufacturing.

The government expects the scheme to drive cumulative mobile phone production worth around ₹39 lakh crore during its five-year tenure, alongside a significant increase in exports. The MPMS is also projected to generate around 60,000 direct jobs, adding to the employment created by the country's expanding electronics manufacturing ecosystem.

₹14,448-crore Ganga Elevated Corridor in Varanasi gets a green signal

Meanwhile, The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the construction of a 46.039-km six-lane Greenfield Ganga Elevated Corridor connecting National Highway-19 (NH-19) with the Varanasi Ring Road in Uttar Pradesh at a total capital cost of ₹14,447.64 crore, aiming to decongest one of the country's busiest religious cities while boosting logistics and tourism infrastructure.

The project, to be executed under the Hybrid Annuity Model (HAM), includes a six-lane elevated main carriageway, an iconic cable-stayed bridge over the Ganga, an extradosed foot over bridge-cum-major bridge, loops, ramps, service roads and link roads. The approved project cost comprises ₹6,037.85 crore towards civil construction (including utility shifting but excluding GST) and ₹541.11 crore for land acquisition.