The Union Cabinet approved Semicon 2.0 on Wednesday, clearing ₹1.27 lakh crore for India’s semiconductor push. The scheme targets full self-reliance in chip production. Prime Minister Narendra Modi chaired the meeting that gave the plan its final approval.
Union IT Minister Ashwini Vaishnaw announced the decision after the Cabinet meeting concluded. “We will be self-reliant in the production of indigenous chips by the end of this programme,” he said. Accordingly, the government wants India off the global chip-import list for good.
Semicon 2.0 Nearly Doubles the First Mission
The new outlay dwarfs the ₹76,000 crore set aside for the original scheme. That first mission, launched in 2021, built India’s chip industry from almost nothing. Officials have already approved twelve manufacturing units under it. Furthermore, those twelve projects have drawn cumulative investments exceeding ₹1.64 lakh crore. Three companies have already started commercial production on Indian soil. Micron, Kaynes and CG Semi now manufacture chips domestically, and another unit should begin production later this year.
This track record matters. In fact, it gives the government proof that its self-reliance goal is not just rhetoric. Semicon 2.0 now aims to scale that early success into a full domestic value chain.
Six Pillars Built Around Self-Reliance
Vaishnaw said Semicon 2.0 rests on six pillars covering the entire semiconductor ecosystem. Each pillar targets a different gap in India’s chip supply chain. Together, they push India toward making chips without foreign dependence.
The first pillar strengthens chip design capability. India already counts 105 startups developing chips domestically. The second pillar backs local suppliers of machines, chemicals and gases used in chip manufacturing. Meanwhile, the third pillar expands fabrication capacity by encouraging new fabs. The government’s first fab is expected to begin operations in 2028. The fourth pillar strengthens packaging and testing facilities, an area where India has already found early success.
The fifth pillar funds research into advanced chip technologies beyond current capability. Additionally, the sixth pillar builds domestic talent for the industry. Over 68,000 students have already trained through 315 universities under the earlier mission.
A Self-Reliant Supply Chain, Not Just Fabs
Semicon 2.0 goes further than building factories alone. It also incentivises suppliers of raw materials like minerals and gases. These inputs currently come largely from abroad, thereby creating a dependency the government now wants to close.
Officials expect the scheme to attract investments worth ₹4 lakh crore over its lifetime. They also project semiconductor production worth ₹2 lakh crore during the same period. However, these remain government projections and have not yet materialised.
Reducing import dependence carries strategic weight beyond economics. Chips power everything from smartphones to defence systems. Therefore, a self-reliant supply chain protects India from global shocks and foreign export curbs alike.
Timing Adds Urgency to the Self-Reliance Push
The approval lands as the world faces a memory chip shortage. Meanwhile, global manufacturers are racing to expand their own production capacity. As a result, India’s self-reliance drive could let it fill part of that gap.
Demand for artificial intelligence hardware adds further pressure on chip supply. AI systems need large volumes of advanced semiconductors to function. Therefore, officials hope Semicon 2.0 positions India to meet a share of this rising demand domestically, rather than through imports.
Global chipmakers already show growing confidence in India’s plans. Companies including AMD, Applied Materials and Lam Research have committed fresh investments here. Consequently, that confidence strengthens the case for India’s self-reliant chip ambitions.
What Comes Next for Semicon 2.0
The Cabinet’s approval marks the start, not the finish, of Semicon 2.0. Accordingly, detailed implementation guidelines and eligibility norms should follow in coming weeks. Companies and investors will watch closely for how incentives get structured.
The real test lies in execution over the next few years. Ultimately, India’s self-reliance goal now depends on turning this outlay into working fabs, trained talent and finished chips.
Source: PIB
Follow The World Times For Such Updates!
